HEALTHSPAN INTEGRATED CARE BROKER AGREEMENT THIS AGREEMENT is entered into as of , 20 (the “Effective Date”) between HealthSpan Integrated Care, an Ohio non-profit corporation (“HealthSpan”), and _________________________________ (“Broker”). RECITALS A. HealthSpan is a licensed Ohio Health Insuring Corporation (“HIC”), which issues, administers and markets health benefit plans for its members in northeastern Ohio. HealthSpan’s affiliate, Kaiser Permanente Insurance Company (“KPIC”) is a licensed Ohio life insurance company. B. Broker is a duly licensed insurance agent or agency qualified to solicit enrollment of employer groups and individuals in health insuring corporation health benefit plans and other products issued, administered or marketed by HealthSpan, including KPIC products. C. HealthSpan desires to engage Broker to solicit enrollment of employer groups and/or individuals in health benefit plans and other products issued, administered or marketed by HealthSpan, including KPIC products, and Broker desires to provide these services to HealthSpan. NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows. 1. SERVICES PROVIDED BY BROKER a. Solicitation; Scope of Authority. Broker is authorized by HealthSpan to solicit applications for enrollment from employer groups and individuals meeting requirements established by HealthSpan for health benefit plans and other products issued, administered or marketed by HealthSpan, including KPIC products, and listed as authorized on Exhibit A (the "Plans"). Broker will use his/her best efforts to solicit and retain enrollment of employer groups and individuals in the Plans. HealthSpan may modify the list of the Plans on Exhibit A on notice to Broker. b. Limitation on Authority of Broker. Broker may not alter, amend, delete or waive the terms or rates of any Plan contract (“Contract”), proposal or application for enrollment or bind HealthSpan in any manner, such as by any promise, statement or representation regarding contract terms, including but not limited to eligibility criteria, benefits or premium amounts. Broker shall not collect any such premium payments, except to the extent Broker is directed to do so by HealthSpan as set forth in Section 1.f., below. c. Broker Training. Prior to soliciting employer groups or individuals to enroll in any Plan, Broker will participate, and require its employees and agents to participate, in a 1 Rev. 10/17/2013 HealthSpan orientation and training program to become informed about the Plans and administrative procedures. Broker will participate, and require its employees and agents to participate, annually in training activities to maintain current knowledge on the Plans and administrative procedures d. Application for Enrollment. Broker will assist employer groups and individuals in completing and submitting applications for enrollment in the Plans in accordance with HealthSpan policies and procedures. Broker acknowledges that Broker has received and reviewed HealthSpan's policies and procedures regarding enrollment in the Plans and understands and agrees to be bound by such policies and procedures. If Broker is not the incumbent broker for a renewing employer group, Broker will obtain from the renewing employer group an agent of record letter in the form attached hereto as Exhibit B, designating Broker as that employer group’s agent of record. Broker shall submit a copy of each such agent of record letter to HealthSpan immediately upon receipt. Each new employer group will designate Broker as its agent of record on the standard group application form. e. Acceptance for Enrollment. HealthSpan or KPIC retains the right to accept or reject any prospective employer group or individual application submitted for enrollment in a Plan by Broker based on the eligibility policies of HealthSpan or KPIC, including, but not limited to, individual underwriting guidelines, location and size of the employer group and HealthSpan’s or KPIC’s employer contribution and group participation rules. In no event will any prospective employer group or individual be eligible to receive health benefits under a Plan unless and until accepted by HealthSpan or KPIC with an effective date determined by HealthSpan or KPIC. Broker will inform all applicants for a Plan that the application is conditional, and subject to acceptance and approval in writing by HealthSpan or KPIC. HealthSpan or KPIC will notify Broker whether an application has been accepted or denied; provided, however, that if Broker is a Subproducer, as defined in Section 3.a.(ii) below, and the applicant is an individual (not a group), then HealthSpan or KPIC will notify the General Agent whether the application has been accepted or denied. If an application is denied, HealthSpan or KPIC will notify only the applicant of the reason for denial, and will not release information on the reason for denial to Broker or a General Agent. f. Premium Collection. HealthSpan will collect all premiums on Contracts solicited by Broker. If HealthSpan directs Broker to collect any premiums, all such premiums collected by Broker will be received and held by Broker in a fiduciary capacity and will be reported and transmitted to HealthSpan, without a written request from HealthSpan, in accordance with HealthSpan policies and procedures. Broker is not authorized to endorse or cash checks, drafts or money orders payable to HealthSpan. g. Servicing of Enrolled Employer Groups and Individuals. Broker will perform all reasonable duties and services required by HealthSpan to service employer groups and individuals solicited by Broker and enrolled in a Plan. If requested by HealthSpan, such duties may include delivery and explanation of administrative forms and renewal forms. Broker will be responsible for fostering positive relations between employer groups or 2 Rev. 10/17/2013 individuals and HealthSpan or KPIC. h. Use of Name and Advertising Materials. Broker will only use advertising and marketing materials provided or approved in writing by HealthSpan when providing services under this Agreement. Broker will not use any such materials on any internet website without the prior written approval of HealthSpan. Broker will comply with HealthSpan policies and procedures regarding the use of all such materials and will return all such materials to HealthSpan on termination of this Agreement or at HealthSpan's request. Broker shall not, without the prior written consent of HealthSpan, use the names, service marks or trademarks of HealthSpan presently existing or hereafter established for any purpose or in any medium. For purposes of this section, “HealthSpan ” means HealthSpan, HealthSpan Integrated Care, HealthSpan Physicians, HealthSpan Hospitals and Kaiser Permanente Insurance Company, and any subsidiary or affiliate of any of the foregoing. i. General Broker Services. Broker will provide the following general services to HealthSpan and KPIC: i. ii. iii. iv. v. vi. vii. viii. Providing and distributing marketing and enrollment literature to existing members and prospective members of a Plan; Assisting HealthSpan personnel with open enrollment activities; Facilitating communication between employer groups or individuals and HealthSpan or KPIC with respect to rates, benefits, and member grievances; Delivering and explaining administrative forms and procedures and maintaining cooperation of employer groups and individuals with HealthSpan’s rules, regulations, and policies; Using Broker's best efforts to maintain or renew Contracts; Presenting HealthSpan rate and Contract proposals fully and fairly; Facilitating, at the request of HealthSpan, direct contact between HealthSpan and individuals or employer groups, their employee benefits personnel, their third party administrators, or their employees who are HealthSpan members or prospective members to provide information, distribute literature, or discuss HealthSpan benefits, or method of operations; Notifying HealthSpan, at least 60 days prior to the proposed termination date, or as soon as Broker is informed, if a current employer group or individual desires to replace HealthSpan’s plan, in order to provide HealthSpan with an opportunity to review and respond to employer’s or individual's needs, concerns and issues. 2. REPRESENTATIONS AND WARRANTIES OF BROKER a. Qualifications. Broker represents and warrants, and will certify annually to HealthSpan, that Broker is duly licensed by the Ohio Department of Insurance to provide the services described in this Agreement, including but not limited to soliciting and selling the Plans listed in Exhibit A. If Broker is a corporate agency, Broker represents and warrants, and will certify annually to HealthSpan, that each employee or agent associated with Broker who solicits and sells the Plans is duly licensed by the Ohio Department of Insurance to 3 Rev. 10/17/2013 provide the services described in this Agreement. HealthSpan and KPIC will file the appropriate forms with the Ohio Department of Insurance to appoint Broker, and if Broker is a corporate agency, employees and agents affiliated with Broker, as agents of HealthSpan and KPIC. HealthSpan may in its discretion charge Broker for annual appointment fees by invoicing Broker or offsetting such fees from commissions otherwise due to Broker under this Agreement. Broker represents and warrants that neither Broker nor Broker's employees or agents will solicit or sell any Plan unless Broker and Broker's employee or agent is duly licensed by the Ohio Department of Insurance to sell such plan and has been appointed by HealthSpan and KPIC. Broker represents and warrants to HealthSpan that Broker has fully disclosed all information requested in HealthSpan's broker application and that all information disclosed in the application is true and correct. Broker will immediately notify HealthSpan in writing if the license of Broker or any of Broker's employees or agents is revoked, expires, or is otherwise limited, or if any information disclosed on a broker application is or becomes inaccurate or misleading after it is submitted. Broker shall notify HealthSpan within three (3) business days of receipt of notice by Broker of any investigation, disciplinary action, sanction or other adverse action against Broker or any employee or agent of Broker by any local, state or federal regulatory authority. b. Independent Contractor. At all times during the term of this Agreement, the relationship between HealthSpan and Broker shall be that of independent contractors. Nothing in this Agreement will be construed to create a relationship of employer and employee, partnership or joint venture between HealthSpan and Broker or KPIC and Broker. As an independent contractor, Broker will pay in a timely manner all income taxes, FICA taxes and other taxes relating to payments made by HealthSpan pursuant to this Agreement. c. Compliance with Laws and Policies. In performing services under this Agreement, Broker will comply with all licensing requirements, statutory and regulatory requirements and HealthSpan and KPIC policies and procedures. d. Insurance. Broker will maintain errors and omissions insurance satisfactory to HealthSpan, with minimum policy limits of $1,000,000 per claim, at all times during the term of this Agreement or while eligible to receive commissions, whichever is longer. Upon request by HealthSpan, Broker will provide evidence of such insurance coverage to HealthSpan. Broker will notify HealthSpan in writing within five (5) days of any proposed cancellation, actual cancellation or material change in coverage of Broker's errors and omission insurance. HealthSpan reserves the right to require Broker to obtain a surety bond. e. Indemnification. Broker will indemnify and hold harmless HealthSpan and KPIC, and their respective directors, agents, officers and employees from any losses, claims, actions, liabilities, damages and expenses (including costs of judgments, settlements, court costs and attorneys’ fees, regardless of the outcome of the claim or action) arising out of or related to the performance or non-performance by Broker or any employee or agent of Broker of any term, condition or obligation under this Agreement. This obligation will 4 Rev. 10/17/2013 survive the termination of this Agreement. f. Nonsolicitation of HealthSpan Employees. During the term of this Agreement, Broker will not, directly or indirectly, on its own behalf or on behalf of any other person, organization or entity, in any fashion, form or manner, without the express prior written approval of HealthSpan, employ, engage, or contract in any manner for the services of, or solicit the services of any of HealthSpan's current employees or any former HealthSpan employees who were employed by HealthSpan at any time during the previous twelve (12) months to work for Broker or any person, corporation, partnership, sole proprietorship, organization, joint venture, or other entity with whom or which Broker is associated. g. Confidential Information. Broker and its employees and agents have been and will be granted access to certain Confidential Information (as hereinafter defined) of HealthSpan and KPIC in the course of performing services under this Agreement. The term “Confidential Information” as used herein includes, but is not limited to information regarding (i) pricing and rating, marketing plans, trade secrets, contract and business practices, underwriting processes, financial statements, costs; (ii) employer groups or individuals; (iii) information or records containing identifiable medical record information, summaries of such medical records and compilations of medical records data; and (iv) any other information that is proprietary or represents a competitive advantage obtained during the term of this Agreement. Broker and its employees and agents will hold all such Confidential Information in strictest confidence, and shall not disclose or permit disclosure to any person or entity, without the prior written consent of HealthSpan. Broker shall return all such Confidential Information and all copies thereof to HealthSpan or its authorized representatives promptly upon HealthSpan’s request. Broker understands and agrees that this Agreement and certain data which may be exchanged hereunder are subject to the Health Insurance Portability and Accountability Act of 1996 and regulations issues thereunder, as amended (“HIPAA”). To the extent applicable, Broker shall comply with HIPAA, including but not limited to HIPAA standards for (a) privacy, (b) code sets, (b) data transmission standards, and (iv) security regarding physical storage, maintenance, transmission of and access to individual health information. The obligations of this section shall survive termination of this Agreement. h. Duty of Loyalty. During the term of this Agreement, Broker and its employees and agents will not encourage or induce any employer group or individual to terminate enrollment in a Plan. i. Subproducer Relationship. If Broker enters into a subproducer relationship with a General Agent, Broker shall provide written documentation to HealthSpan duly executed by both Broker and the General Agent acknowledging the subproducer relationship and the terms of this Agreement, setting forth the arrangement between Broker and General Agent regarding the payment of commissions due from HealthSpan on Contracts solicited by Broker, the effective date of the subproducer relationship and providing such other information as HealthSpan may reasonably request to effectuate the terms of this Agreement. Such documentation shall be substantially in one of the two forms set forth 5 Rev. 10/17/2013 in Exhibit D and shall be appended to Exhibit D to evidence the subproducer relationship. Broker shall provide written notice to HealthSpan, with a copy to the General Agent, upon termination of a subproducer relationship, setting forth an effective date of termination, which shall be after receipt by HealthSpan of the notice. As of the effective date of termination of Broker’s subproducer relationship with a General Agent, all commissions due under this Agreement shall be paid to Broker and not to General Agent. HealthSpan reserves the right, in its sole discretion, to refuse to recognize to any subproducer relationship, on written notification to Broker. For purposes of this Agreement, “General Agent” means a general agent with whom HealthSpan has a general agent agreement currently in effect. A Broker who enters into a subproducer relationship with a General Agent as described herein is sometimes referred to in this Agreement as a “Subproducer.” j. Character and Fitness. Broker hereby authorizes HealthSpan, or its designee, to perform character and fitness investigations (including, but not limited to, credit and/or criminal background investigations) on an annual basis or at such other times as determined to be necessary by HealthSpan in the exercise of its sole discretion. Inquiries may include contacting individuals with whom you are acquainted and checking records that can include information as to your character, general reputation, criminal background, personal characteristics, and mode of living, and such other inquiries and investigations as HealthSpan deems necessary. Broker shall cooperate with HealthSpan and/or its designee for purposes of performing character and fitness investigations, including, but not limited to, supplying any applicable authorizations as may be required from time to time. Broker’s failure to cooperate shall be deemed a material breach of this Agreement giving rise to a right of termination under Section 4.c. 3. PAYMENTS BY HEALTHSPAN a. Payment of Commissions. In consideration of the services provided by Broker under this Agreement and subject to the terms of Section 3 and the Broker Agent of Record Policy attached hereto as Exhibit C and incorporated herein by this reference, HealthSpan will pay to Broker, or to Broker’s General Agent, as applicable, on a monthly basis, a commission on valid in-force Contracts maintained by employer groups and individuals solicited by Broker, who have been accepted by HealthSpan or KPIC for enrollment in a Plan, and, with respect to employer groups, who have designated Broker as their agent of record. HealthSpan may modify the Broker Agent of Record Policy on thirty (30) days prior written notice to Broker, without the consent of Broker. If Broker is a Subproducer who has authorized and directed HealthSpan to make payments of commissions directly to a General Agent and HealthSpan has agreed to do so, then on and after the effective date of such authorization, and until the effective date of termination of the subproducer relationship, in accordance with Section 2.i., HealthSpan shall have no obligation to pay commissions directly to Subproducer and Subproducer shall have no recourse against HealthSpan or KPIC for any commissions paid by HealthSpan to Subproducer’s General Agent prior to the effective date of termination of Subproducer’s subproducer relationship with the General Agent. Broker agrees that, except for the compensation payable by HealthSpan to Broker under this Agreement, Broker is not entitled to and 6 Rev. 10/17/2013 shall not accept payments, commissions or other compensation related to the marketing, solicitation, sale, placement or issuance of, or enrollment under, Contracts subject to this Agreement, regardless of the source of payment, unless HealthSpan expressly approves such payment in writing. Broker agrees to disclose to HealthSpan any payments, commissions or other compensation received by Broker from any source other than HealthSpan related to the marketing, solicitation, sale, placement or issuance of, or enrollment under, Contracts subject to this Agreement, and HealthSpan shall have the right to reduce the commission which Broker is entitled to receive for such Contracts under this Agreement by the amount of such payments, and to recover any overpayment as a result thereof pursuant to Section 3.f. b. Calculation of Commission. Commissions due under Section 3.a. above will be calculated based on the current commission schedule, attached hereto as Exhibit E and incorporated herein by this reference. HealthSpan may modify the current commission schedule on thirty (30) days’ prior written notice to Broker at any time, without obtaining the consent of Broker. Unless otherwise specified in the revised commission schedule, each revised commission schedule shall apply to all Contracts solicited by Broker and accepted by HealthSpan and/or any renewals thereof after the date such new commission schedule becomes effective. Notwithstanding the foregoing, HealthSpan shall not pay commissions for (i) time periods for which premiums under a Contract have not been collected from employer groups or individuals; (ii) with respect to Contracts which have been terminated for nonpayment of premium, time periods for which premiums under the Contract were not collected until after the date of notice of termination; (iii) Contracts for any Plans not listed in Exhibit A or excluded from Broker’s scope of authority, as set forth on Exhibit A; (iv) individual conversion, individual Medicare or HIPAA products; or (v) Contracts for which premiums are paid to a Kaiser Foundation Health Plan, even if such premiums are paid by an employer group or individual solicited by Broker. The term “commission” includes any override commissions described on Exhibit E. c. Timing of Payments. Commissions payable under this Section 3 will be paid by HealthSpan on a monthly basis for Plan Contracts solicited by Broker for which premiums due are collected and paid in cash to HealthSpan. Except as provided in Subsections 3.d. and 3.e., and the Broker Agent of Record Policy, such amounts will be paid no later than sixty (60) days after the end of the month in which the premiums are collected. d. Duration of Payments. During the term of this Agreement and subject to the terms of Section 3 and the Broker Agent of Record Policy, commissions will be paid on each Plan Contract solicited by Broker, so long as (i) Broker has not breached any term of this Agreement; (ii) the Contract has not been terminated or nonrenewed; and (iii) Broker was a licensed and appointed broker at the time such commissions were earned and, with respect to group Contracts, Broker is the Agent of Record for the group. If this Agreement is terminated by HealthSpan for cause pursuant to Section 4.c., payment of all commissions will cease upon termination of this Agreement. If this Agreement is terminated without cause pursuant to Section 4.b., then notwithstanding such termination, so long as the requirements set forth in the first sentence of this section continue to be 7 Rev. 10/17/2013 met, HealthSpan will continue to pay commissions to Broker or Broker's General Agent, as applicable, pursuant to the terms of this Agreement for the remainder of the then current term of each Contract for which Broker is otherwise entitled to payment of commissions under this Agreement. e. Minimum Payment; Fees. If commission payments due in any month are less than $25.00, payment will be deferred until the earlier to occur of (i) the end of the calendar year or (ii) the next month in which aggregate commission payments due are $25.00 or more. HealthSpan may offset annual appointment fees for Broker and Broker’s affiliated employees and agents, as described in Section 2.a., from any commission payment otherwise due under this Agreement. f. Error in Payment. Within five (5) business days of notice or discovery by any party, Broker will reimburse HealthSpan for any commissions erroneously paid for any reason, including but not limited to, payment resulting from clerical error or payment resulting from a premium payment returned by HealthSpan to the group or individual that purchased the Plan. HealthSpan may at its sole option, elect to collect any overpayments offsetting such amounts against commissions owed by HealthSpan to Broker under this Agreement, or by requiring payment of a lump sum. If Broker is a Subproducer who has authorized and directed HealthSpan to make payments to a General Agent, the General Agent shall be obligated under this Section 3.e, in the same manner as Broker is obligated to reimburse HealthSpan for erroneously paid commissions. g. Termination of Contracts. Upon termination or nonrenewal of any Contract solicited by Broker, commissions payable under this Agreement will cease as of the effective date of the termination or nonrenewal. Upon termination of any Contract by HealthSpan or KPIC for nonpayment of premium, Broker will not be entitled to the payment of any commission for past due premium collected by HealthSpan after the date of the notice of termination. Broker will affirmatively assist HealthSpan in its efforts to collect overdue and unpaid premiums from groups and individuals solicited by Broker. 4. TERM AND TERMINATION. a. Term. The term of this Agreement will commence on the Effective Date and will continue in effect until such time as this Agreement is terminated pursuant to Section 4.b. or 4.c., below. b. Termination Without Cause. This Agreement may be terminated by either party at any time, without cause, upon no less than thirty (30) days prior written notice to the other party. c. Termination With Cause. HealthSpan may terminate this Agreement immediately upon written notice to Broker in the event that (i) Broker's insurance license in Ohio is limited, suspended or terminated, or Broker fails to provide HealthSpan with timely notification of any modification to the insurance policy required under Section 2.d. of this Agreement; (ii) Broker is investigated, disciplined or sanctioned, or an adverse action is 8 Rev. 10/17/2013 taken, by any state or federal regulatory authority, or Broker fails to provide HealthSpan with timely notification of such actions as required by Section 2.a. of this Agreement, or Broker otherwise fails to cooperate with HealthSpan or its designee in the performance of character and fitness investigations as required by this Agreement; (iii) Broker fails to complete fully and remit promptly renewal applications and related information requested by HealthSpan; (iv) Broker commits or is alleged to have committed any act of fraud, material misrepresentation, misfeasance or malfeasance, as determined by HealthSpan in its sole discretion including, but not limited to, alterations by Broker or directed to be made by Broker, to the information disclosed on individual, group and employee applications, enrollment documents and/or any other materials submitted by Broker on behalf of employer groups and/or individuals; (v) Broker fails to comply with any provision of this Agreement or a policy or procedure of HealthSpan or KPIC; (vi) any state or federal court, regulatory or administrative body or agency orders the termination of this Agreement or no longer permits the arrangements specified in this Agreement; (vii) HealthSpan gives notice that it or KPIC is no longer offering the Plans specified in Exhibit A and/or gives notice that it will cease doing business in Ohio; (viii) Broker or an employee or agent of Broker acts in a disruptive, unruly or abusive manner toward HealthSpan employees or agents or to prospective or existing customers, or other brokers, as determined by HealthSpan in the exercise of its sole discretion; (ix) HealthSpan determines in the exercise of its sole discretion that (A) a material number of employer groups and/or individuals solicited by Broker have requested termination or rescission or otherwise brought actions to terminate or rescind their Contracts, or (B) HealthSpan or KPIC has requested termination or rescission or otherwise brought actions to terminate or rescind its Contracts with a material number of employer groups and/or individuals; (x) HealthSpan determines in the exercise of its sole discretion that (A) one or more employer groups and/or individuals solicited by Broker have requested termination or rescission or otherwise brought actions to terminate or rescind their Contracts on grounds of material significance to HealthSpan or KPIC, or (B) HealthSpan has requested termination or rescission or otherwise brought any action to terminate or rescind Contracts with one or more employer groups and/or individuals on grounds of material significance to HealthSpan or KPIC; (xi) Broker files a petition for bankruptcy or insolvency under federal or state law, or upon the appointment of a receiver to handle the affairs of Broker; or (xii) in the event of Broker’s death. d. Effect of Termination. Broker will be removed as Agent of Record on all Contracts solicited by Broker, immediately, in the event of termination under Section 4.c., and as of the next renewal date of each Contract, in the event of termination under Section 4.b. Upon termination of this Agreement, Broker shall immediately pay all sums due HealthSpan and shall deliver to HealthSpan or its representative all Confidential Information and all rate books, computer disks, letters, records and supplies connected with the business of HealthSpan. Failure to return supplies may result in a charge against Broker for the cost of these supplies, in addition to any other remedies available to HealthSpan. 9 Rev. 10/17/2013 5. MISCELLANEOUS. a. Dispute Resolution and Arbitration. In the event a dispute arises between Broker and HealthSpan with respect to their rights or obligations under this Agreement that cannot be resolved to the mutual satisfaction of both parties, such dispute, upon the written request of either party, shall be submitted to arbitration. Such arbitration shall be conducted in Cuyahoga County, Ohio, pursuant to the rules of the American Arbitration Association, and shall be before three (3) arbitrators. Each party shall appoint one arbitrator, and the two arbitrators shall select the third. If either party refuses or neglects to appoint an arbitrator within thirty (30) days after the receipt of written notice from the other requesting that it do so, the requesting party may appoint two arbitrators. If the two arbitrators fail to agree in the selection of a third arbitrator within thirty (30) days of their appointment, each of them shall nominate two candidates, of whom the other shall decline one. The selection of the third arbitrator from the remaining two candidates shall be made by drawing lots. The decision in writing of any two arbitrators shall be final and binding on both parties. Judgment may be entered upon the final decision of the arbitrators in any court having jurisdiction in Cuyahoga County, Ohio. Each party shall bear the expense of its own arbitrator, and the parties shall equally divide the expense of the third arbitrator and of the arbitration proceedings. b. Notice. Any notice permitted or required by this Agreement will be considered made on the date personally delivered in writing or mailed by certified mail, postage prepaid, to the other party at the address set forth below or to such other person or address as either party may designate in writing: Broker: See address set forth on signature page HealthSpan: HealthSpan Integrated Care Attention: Broker/Agent Policies and Commissions 1001 Lakeside Avenue, Suite 1200 Cleveland, OH 44114-1153 c. Entire Agreement/Modification. Neither party to this Agreement has made any representation or warranty relating to this Agreement or the subject matter of this Agreement except those specifically contained in writing in this Agreement. This Agreement contains the entire understanding of the parties and can be modified only by a written document signed by each party. Notwithstanding the preceding sentence, (i) HealthSpan may unilaterally modify Exhibit A, pursuant to Section 1.a., the commission schedule pursuant to Section 3.b., and Exhibit C, the Broker Agent of Record Policy, pursuant to Section 3.a., of this Agreement, and (ii) HealthSpan may modify any other provisions of this Agreement on written notification to Broker. Such amendments shall be effective without execution by the Broker. Upon receipt of written notification that the Agreement is being amended by HealthSpan, Broker may terminate the Agreement pursuant to Section 4.b. on written notification to HealthSpan. Unless a later date is specified in the amendment, amendments shall be effective thirty (30) days after the date of the notification; provided however, if notice of termination by the Broker is received 10 Rev. 10/17/2013 by HealthSpan prior to the effective date of the amendment, the amendment shall not be effective and the Agreement shall terminate as of the proposed effective date of the amendment. If a modification of this Agreement is reasonably determined by HealthSpan to be required as a result of requirement in or changes to local, state or federal law, HealthSpan shall notify Broker of the required modification and this Agreement shall be deemed amended, without the requirement of Broker’s consent, as of the date of such notice. d. Waiver. The waiver by HealthSpan or Broker of a breach of this Agreement will not operate as a waiver of any subsequent breach. No delay in acting with regard to any breach of this Agreement will be construed to be a waiver of the breach. e. Assignment. This Agreement may not be assigned by Broker without the prior written consent of HealthSpan. f. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Ohio without regard to the principles of conflicts of law. g. Severability. In the event that any term or condition of this Agreement is determined to be invalid or unenforceable by a court of competent jurisdiction, such term or condition shall be severed from this Agreement and the remaining terms and conditions given their full force and effect. h. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument. i. Construction. Headings contained in this Agreement are for convenience only and shall not be used in the interpretation of this Agreement. j. Time is of the Essence. Time is of the essence in the performance of each and every term of this Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 11 Rev. 10/17/2013 IN WITNESS WHEREOF, Broker and HealthSpan have executed this Agreement as of the Effective Date. BROKER By: __________________________ Print Name: __________________________ Title: __________________________ Address: __________________________ (Signature) __________________________ Phone: __________________________ Fax: __________________________ Email: __________________________ Social Security Number:__________________________ (Individual) Federal Tax ID Number:__________________________ (Corporation) HEALTHSPAN INTEGRATED CARE {Signature on file} Kenneth C. Page President and CEO HealthSpan Integrated Care 12 Rev. 10/17/2013 Exhibit A AUTHORIZED PLANS All HealthSpan for Individuals and Families Plans All HealthSpan Group HMO and POS Plans (excluding Group Medicare) KPIC Out of Area Plans Other products that may be marketed by HealthSpan, such as dental and employee assistance programs 13 Rev. 10/17/2013 SPECIAL PRODUCTS PORTFOLIO Broker is authorized to market the products checked in the first column, from among those in the HealthSpan Special Products Portfolio. HealthSpan may limit the foregoing authorization to segments of the market that meet specific criteria, such as size or other limiting characteristics. Broker authorized to market? X Products authorized from the HealthSpan Special Products Portfolio Endorsement arrangements with Associations* Limitations by size or other criteria Bona Fide Associations only * In addition to compensation otherwise due under this Agreement, HealthSpan shall pay to Broker, if Broker is the “founding broker” identified by an association in an Endorsement Agreement with HealthSpan, an override commission in the amount of 1% of premium on all Contracts for Groups of 2-99 written through that association during the first 12 months that Endorsement Agreement is in effect, an override commission in the amount of ½% during the second 12 months that Endorsement Agreement is in effect, and an override commission in the amount of ¼% during the third 12 months that the Endorsement Agreement is in effect. Thereafter, no additional override commissions based on “founding broker” status shall be payable. Such override commissions are calculated each month by projecting the aggregate premiums payable during the first 12 months of an Endorsement Agreement on all of Broker’s eligible employer Contracts for Groups of 2-99 written through that Endorsement Agreement. For example, if all such Contracts in force in a month are projected to yield $300,000 over the first 12 months of the Endorsement Agreement through which those Contracts are written, then Broker will be paid in that month an additional override commission in the amount of 1% of $300,000. This override commission is calculated separately for each Endorsement Agreement for which Broker is the “founding broker.” 14 Rev. 10/17/2013 Exhibit B AGENT OF RECORD LETTER FORM Sample (EMPLOYER GROUP LETTERHEAD) (Date) HealthSpan ATTN: Broker/Agent Policies and Commissions North Point Tower 1001 Lakeside Avenue, Suite 1200 Cleveland, OH 44114-1153 RE: (Employer Name) (Policy Number) To: HealthSpan of Ohio Effective [date], we wish to name ___________________ as our Agent of Record for our HealthSpan and/or Kaiser Permanente Insurance Company contracts. Our named Agent is the only organization to whom any information (routine or confidential) should be released without previous written authorization. This letter also entitles our Agent to represent us exclusively to HealthSpan. We understand that HealthSpan may pay a commission to our Agent. This agreement is to remain in force until we provide HealthSpan with written notification from an officer of our company directing HealthSpan to discontinue Agent of Record status and/or replacement of Agent of Record. Sincerely, (Name) (Title) cc: (Agent) 15 Rev. 10/17/2013 Exhibit C BROKER AGENT OF RECORD POLICY Effective January 1, 2008 “New Business” means HealthSpan Contracts with employer groups, where Broker originates the Contract between the group and HealthSpan, and is designated the agent of record (“AOR”) on the group’s application form. “AOR Existing Business” means HealthSpan Contracts with employer groups, where Broker did not originate the Contract between the group and HealthSpan but Broker has been designated the agent of record by the employer group and HealthSpan has recognized the designation. COSE and association groups shall not be considered AOR Existing Business or New Business for purposes of this policy. Broker’s AOR Existing Business plus New Business, combined, are Broker’s “Book of Business.” A group wishing to designate Broker as its agent of record must provide to HealthSpan an agent of record letter (“AOR Letter”) on company letterhead, substantially in the form of Exhibit B to this Agreement. If Broker is the incumbent broker for an employer group, HealthSpan will notify Broker promptly upon receipt of an AOR Letter from the group designating an agent of record other than Broker. HealthSpan will recognize the new agent of record designation as of the date indicated in the letter, however, commissions will be payable as of the first day of the calendar month next occurring after HealthSpan’s receipt of the new designation. Commissions are payable on New Business, subject to the following rule: • Commissions are payable on New Business during the first HealthSpan Contract year, without regard to whether Broker continues to be the recognized agent of record for the entire year. Commissions are payable on AOR Existing Business 1, where Broker becomes the recognized agent of record for an employer group with an existing HealthSpan Contract, either because the group previously did not have an agent of record or the group is changing brokers, subject to the following rules: • If the group is in the first HealthSpan Contract year, HealthSpan will consider the group to be Broker’s commissionable AOR Existing Business as of the group’s renewal date next occurring after the Broker’s AOR Letter is received by HealthSpan; provided, however, that if such a group previously did not have an agent of record and if Broker has New Business in Broker’s Book of Business, then HealthSpan will consider the group to 1 Commissions are payable on AOR Existing Business only when, and to the extent that, commissions are included in the rates paid by the group under the group’s HealthSpan Contract. 16 Rev. 10/17/2013 be Broker’s commissionable AOR Existing Business as of the first day of the calendar month next occurring after the date HealthSpan receives the Broker’s AOR Letter. • If the group is not in its first HealthSpan Contract year, HealthSpan will consider the group to be Broker’s commissionable “AOR Existing Business” as of the group’s renewal date next occurring after the date Broker’s AOR Letter is received by HealthSpan; provided, however, that if, as of such date, Broker has New Business in Broker’s Book of Business, then HealthSpan will consider the group to be commissionable “AOR Existing Business” as of the first day of the calendar month next occurring after the AOR Letter is received by HealthSpan, or the group’s renewal date, whichever is sooner. Commission payments on a group will cease as of the date any successor broker is entitled to commissions on the same group under this policy. HealthSpan will in no circumstance be obligated to pay commissions to two brokers, for the same time period, for the same group. HealthSpan may, in its sole discretion, interpret this policy and make exceptions under this policy. HealthSpan’s decisions on any disputes arising under this policy are final and not subject to the dispute resolution provisions of the Agreement. 17 Rev. 10/17/2013 Exhibit D-1 DOCUMENTATION OF SUBPRODUCER - GENERAL AGENT RELATIONSHIP [HealthSpan pays General Agent; General Agent pays Broker] Sample (BROKER AGENCY LETTERHEAD) (Date) HealthSpan ATTN: Broker/Agent Policies and Commissions 1001 Lakeside Avenue, Suite 1200 Cleveland, OH 44114-1153 RE: GA Authorization This serves as formal notification of our intention to utilize _____________ (“General Agent”) as our servicing general agency (Tax ID# _________________) for HealthSpan and Kaiser Permanente Insurance Company effective ________________. We will utilize General Agent to manage new prospect quoting, client renewals, and other service-related responsibilities. We are hereby authorizing and directing HealthSpan to pay to General Agent all commissions that our broker agency earns under the terms of our Broker Agreement with HealthSpan as of the date set forth above. This arrangement will remain in effect until an officer of our broker agency provides you with written notice that our arrangement with General Agent has terminated. As of the effective date of termination of our arrangement with General Agent, all commissions earned under the terms of the Broker Agreement with HealthSpan shall be due and payable to our broker agency, not General Agent. Sincerely, (Name) (Title) ACKNOWLEDGEMENT BY GENERAL AGENT: The undersigned duly authorized representative of General Agent acknowledges and agrees that it has entered into a subproducer relationship with the above-referenced Broker. General Agent shall comply with the obligations of Broker set forth in Section 3.f. of the Broker Agreement regarding repayment to HealthSpan of commissions erroneously paid. General Agent acknowledges that as of the effective date of termination by Broker of the subproducer relationship, all commissions earned under the Broker Agreement shall be due and payable to Broker, not General Agent. GENERAL AGENT: _________________________ By: _______________________________________ Title: ______________________________________ Date: ______________________________________ 18 Rev. 10/17/2013 Exhibit D-2 DOCUMENTATION OF SUBPRODUCER – GENERAL AGENT RELATIONSHIP [HealthSpan pays Broker] Sample (BROKER AGENCY LETTERHEAD) (Date) HealthSpan ATTN: Broker/Agent Policies and Commissions 1001 Lakeside Avenue, Suite 1200 Cleveland, OH 44114-1153 RE: GA Authorization This serves as formal notification of our desire to utilize _____________ (“General Agent”) as our servicing general agency (Tax ID# _________________) for HealthSpan and Kaiser Permanente Insurance Company effective ________________. We will utilize General Agent to manage new prospect quoting, client renewals, and other service-related responsibilities. It is understood that all commissions that our broker agency has earned will continue to be paid directly to us from HealthSpan. This arrangement will remain in effect until an officer of our broker agency provides you with written notice that our arrangement with General Agent has terminated. Sincerely, (Name) (Title) ACKNOWLEDGEMENT BY GENERAL AGENT: The undersigned duly authorized representative of General Agent acknowledges and agrees that it has entered into a subproducer relationship with the above-referenced Broker. GENERAL AGENT: _________________________ By: _______________________________________ Title: ______________________________________ Date: ______________________________________ 19 Rev. 10/17/2013 Exhibit E CURRENT BROKER COMMISSION SCHEDULE HealthSpan shall pay commissions to Broker pursuant to Section 3 of the Agreement in accordance with the following schedule: I. BASE COMMISSION – GROUP CONTRACTS HealthSpan will pay to Broker a base commission on all employer group Contracts for which Broker is Agent of record, as follows: A. For employer groups with 51 or more eligible employees, the base commission payment will be separately negotiated and will not exceed 5% of premium. B. For employer groups with 2-50 eligible employees, base commission will be paid at a flat rate per enrolled employee per month (“PEPM”) as follows: Standard All Brokers 2-9 (New and Renewal) 10-24 (New and Renewal) 25-50 (New and Renewal) $17.50 PEPM $19.00 PEPM $22.50 PEPM Max Load 2-50 (New and Renewal) All Brokers $12.00 PEPM C. The base commission set forth above is applicable to all renewals and new group Contracts with a renewal or effective date of January 1, 2012 or later. Effective January 1, 2012, base commission for small groups of 2 to 50 will no longer be calculated and paid based on premium collected. 20 Rev. 10/17/2013 II. OVERRIDES AND BONUSES - GROUP CONTRACTS A. Producer Override on Group Contracts. In addition to the base commission, HealthSpan shall pay an override commission on all contracts for employer groups with 2 to 99 eligible employees. Override commissions are calculated and paid monthly based on 1) a monthly projection of the annual aggregate of non-Medicare premiums on all of Broker’s eligible employer group Contracts with 2-99 eligible employees and 2) Broker’s KP broker status (A,B,C) Est Annual BOB Premium 500K-1M 1-1.5M 1.5-2M 2M+ A 0.5% 1.0% 2.0% 3.0% B 0.5% 1.0% 1.5% 2.0% C 0.25% 0.50% 1.00% 1.50% B. Small Group Equalization Bonus (Paid on Groups 2-50 Employees). In addition to the base commission and the producer override, HealthSpan will pay to Broker a small group equalization bonus on all of Broker’s eligible small employer group Contracts with 2 to 50 eligible employees, excluding max load groups. The small group equalization bonus will be paid at a flat rate per enrolled employee per month, and will vary based on your KP broker status (A,B,C), as follows: A B C Per Enrolled Employee Per Month $7.50 $5.00 $ C. Override commissions and bonuses are calculated and paid based on non-Medicare premiums or enrollment only. Override commissions and bonuses are not payable on Max Load Groups, and commissions or enrollment from Max Load Groups is not included in the calculation of override commissions or bonuses. “Max Load Group” means a group which is actuarially rated at the highest tier, per HealthSpan’s rating rules and policies. D. The Producer Override commission schedule set forth above in subsection II.A. is effective January 1, 2012, and is applicable as of the effective date to both in force and new group Contracts. The Small Group Equalization Bonus set forth above in subsection II.B. is effective January 1, 2012, and is applicable to renewals and new group Contracts with a renewal or effective date of January 1, 2012 or later. 21 Rev. 10/17/2013 III. COMMISSION – INDIVIDUAL CONTRACTS A. Effective May 1, 2011, HealthSpan will pay Broker a commission on HealthSpan for Individuals and Families Enrollment, as follows: New Business: $26 per member per month for each month through the end of the initial 12-month HealthSpan for Individuals and Families enrollment period. Renewal Business: $15 per member per month for each month subsequent to the initial 12-month HealthSpan for Individuals and Families enrollment period. 2 B. The commission rates set forth above on individual contracts were effective May 1, 2011 on all in force and new business. C. No commission will be paid on any individual business other than individual and family Contracts. No commission will be paid on conversion contracts, Medicare contracts, open enrollment contracts or HIPAA basic and standard contracts. 2 For example, if Member A was enrolled effective May 1, 2011 commission will be paid at a rate of $26 per month until April 30, 2012. Beginning with premium received in May 2012, the commission rate will be $15 per month. 22 Rev. 10/17/2013
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