5To:
FROM:
DATE:
SUBJECT:
BACKGROUND:
CITY OF SOUTH MIAMI
OFFICE OF THE CITY MANAGER
INTER-OFFICE MEMORANDUM
The Honorable Mayor & Members of the City Commission
2001
Hector Mirabile, PhD, City Manager/r r
August 13, 2012 Agenda Item No.:~
A Resolution authorizing the City Manager to contract with Gabriel Roeder
Smith & Company to perform other Post-Employment Benefits (OPEB)
valuation required under the GASB for fiscal year 2012 Comprehensive Annual
Financial Report (CAFR), for a fixed retainer not to exceed $6,000 charging
account 001.1410.513.3210, Finance Auditor's Fee, for fiscal year 2013.
State and local government employers provide Other Post-Employment Benefits
(OPEB) to retirees in addition to typical pension benefits. OPEB takes form of
retiree health insurance, dental, vision, prescription drug, life, or other
healthcare benefits. GASB No.45 -Accounting and Financial Reporting by
employers for post-employment benefits other than pension establishes new
standards for the recording of OPEB expense and the liabilities in the financial
reports of state and local government employers.
Furthermore, employers must account for and report the annual cost of OPEB
similar to how pensions are reported. Florida State Statues require that the
employer make health coverage available to retirees at the employer's group
rate. For purpose of GASB 45, a valuation is an examination of other (than
pension) post-employment benefits to assess the cost and liability associated
with those benefits. Valuations are typically handled by actuaries with specific
qualifications to perform the work.
The City Manager is requesting to contract with Gabriel Roeder Smith &
Company, the pension board's current actuary, to perform the Other Post
Employment Benefits (OPEB).
Actuarial and Consulting Firms
Florida League Of Cities
Gabriel Roeder Smith & Company
Milliman
$ 7,875.00
$ 6,000.00
$ 9,000.00
Amount:
Account:
ATTACHMENTS:
A fixed retainer amount not to exceed $6,000
001.1410.513.3210, Finance Auditor's Fee, for fiscal year 2013.
Resolution for approval.
GRS proposal.
Milliman proposal.
Florida League of Cities/ Southern Actuarial proposal.
1 RESOLUTION NO. ______ _
2 A Resolution authorizing the City Manager to contract with
3 Gabriel Roeder Smith & Company to perform other Post-
4 Employment Benefits (OPEB) valuation required under the
5 GASB for fiscal year 2012 Comprehensive Annual Financial
6 Report (CAFR), for a fixed retainer not to exceed $6,000
7 charging account 001.1410.513.3210, Finance Auditor's Fee,
8 for fiscal year 2013.
9 WHEREAS, the state and local government employers provide Other Post-
10 Employment Benefits (OPEB) to retirees in addition to typical pension benefits. OPEB
11 takes form of retiree health insurance, dental, vision, prescription drug, life, or other
12 health care benefits; and,
13 WHEREAS, GASB No.45 -Accounting and Financial Reporting by employers
14 for post-employment benefits other than pension establishes new standards for the
15 recording of OPEB expense and the liabilities in the financial reports of state and local
16 government employers; and,
17 WHEREAS, employers must account for and report the annual cost of OPEB
18 similar to how pensions are reported. Florida State Statues require that the employer
19 make health coverage available to retirees at the employer's group rate; and,
20 WHEREAS, for the purpose of GASB 45, a valuation is an examination of
21 other (than pension) post-employment benefits to assess the cost and liability associated
22 with those benefits. Valuations are typically handled by actuaries with specific
23 qualifications to perform the work; and,
24 NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY
25 COMMISSION OF THE CITY OF SOUTH MIAMI, FLORIDA THAT;
26 Section I. The City Manager is authorized to contract with Gabriel Roeder
27 Smith & Company, the pension board's current actuary, to perform the Other Post-
28 Employment Benefits (OPEB) valuation required under the GASB for fiscal year 2012
29 Comprehensive Annual Report (CAFR), for a fixed retainer not to exceed $6,000 using
30 account 001.1410.513.32.10, Finance Auditor's Fee, for fiscal year 2013.
31 Section 2. This resolution shall take effect immediately upon adoption.
32 PASSED AND ADOPTED this __ day of , 2012
33 ATTEST: APPROVED:
34
35
36 CITY CLERK MAYOR
37
38
39 READ AND APPROVED AS TO FORM,
40 LANGUAGE, LEGALITY AND
41 EXECUTION THEREOF
42
43
44
45 CITY ATTORNEY
COMMISSION VOTE:
Mayor Stoddard:
Vice Mayor Liebman:
Commissioner Newman:
Commissioner Harris:
Commissioner Welsh:
GRS Gabriel Roeder Smith & Company
Consultants & Actuaries
May 22,2012
Mr. Alfredo Riverol
Chief Financial Officer
City of South Miami
6130 Sunset Drive
South Miami, Florida 33143
One East Broward Blvd.
Suite 505
Ft. Lauderdale, FL 33301-1804
954.527.1616 phone
954.525.0083 fax
www.gabrielroeder.com
Re: Retiree Health Care Program -Actuarial Valuation as of October 1, 2011
Dear Alfredo:
As requested, Gabriel, Roeder, Smith & Company (GRS) is pleased to present this
Engagement Letter for professional actuarial and consulting services to provide an
Actuarial Valuation for the City of South Miami Retiree Health Care Program under
Governmental Accounting Standards Board Statement Numbers 43 and 45 (GASB 43
and 45).
We are enthusiastic about extending our existing relationship with the City on this
important assignment. We have a long-standing commitment and experience with
working on behalf of public sector benefit programs. Our philosophy of developing a
partnership with our clients emphasizes the collaborative nature of the GRS working
relationship. We strive to earn your trust as your advisor. We will continue to work
together with you in the best interest of the interested parties.
Description of Services
The professional services would be provided under the supervision of Larry Wilson,
A.S.A., a Senior Consultant and Actuary with over 25 years of experience in employee
benefit plans, Pete Strong, A.S.A., a Consultant and Actuary with 15 years of experience
with employee benefit plans and Jen Borregard, a Senior Analyst with over ten years of
experience with retirement systems.
The following provides a brief description of our understanding of the requested services
that will be provided as a part of this actuarial valuation.
» Costs and liabilities will be developed under the following Scenarios:
./ pay-as-you-go approach using a 4.0% discount rate
./ advance funding approach using a 7.0% discount rate.
» Please advise whether you are requesting costs and liabilities allocations
among Enterprise Units (e.g. Water & Sewer, Solid Waste, etc.), and provide
a list of Enterprise Units, if applicable.
Mr. Alfredo Riverol
May'22,2012
Page Two
Our report will add value by including:
).> Primer on available funding vehicles
).> 3-year projections through September 30,2014 for both scenarios (including
separate projections for each Enterprise Unit, if requested)
).> Sensitivity analysis of the health trend rates
Our Actuarial Valuation as of October 1, 2011 will include three year projections through
fiscal year ending September 30,2014. The next required Actuarial Valuation will be
October 1, 2014 assuming no material program changes and the number of participants
remains under 200.
Data Requirements
Upon engagement, we understand the City will provide census data, medical insurance
information and other information needed generally in electronic (spreadsheet) form. We
expect information relating to coverages and eligibilities will be provided in hard copy -
Plan Documents / member booklets.
• Census Data Requirements
Please see the attached request for retiree census information as of October 1,
2011 needed in order to complete the valuation. If the City has its own Fire
Department, we will need complete census data for any City Firefighters.
• Plan Document and Financial Information
• Please provide the following information:
).> Current summary plan description (booklet) for each benefit
).> Any changes being considered
).> Fiscal year 2011 total claims paid and an average head count of
covered participants (for 12-month period ended September 30,
2011) -see attached
).> Schedule of premiums / contributions -see attached
• Please update the attached draft Summary of Benefits by filling in the
Summary of Benefits as of October 1, 2011 for the City of South Miami.
Gabriel Roeder Smith & Company
/,-'
Mr. Alfredo Riverol
May 22,2012
Page Three
Our fees will depend on whether costs, liabilities and projections will be allocated among
Enterprise Units.
If no allocation among Enterprise Units is requested, we anticipate our not-to-exceed fee
will be $6,000.
If allocation is requested among Enterprise Units, we anticipate our not-to-exceed fee for
will be $7,250.
Our report will include projections for the three year period ending September 30,2014.
The next required Actuarial Valuation will be as of October 1, 2014 assuming no material
program changes and the number of participants remains under 200.
Please see the attached Scope of Services Exhibit for a detailed explanation of the services
that are included in this fee.
Timing
The Actuarial Valuation will be delivered within sixty (60) days following direction to
proceed and receipt of all necessary member census data, medical insurance information
and plan documentation.
We look forward to your response and to the opportunity to work with you on this
important project. Please do not hesitate to contact us should you have any questions or
require additional information.
Sincerest regards,
~.~.~~
Lawrence F. Wilson, A.S.A.
Senior Consultant and Actuary
Enclosures
u~
Peter N. Strong, A.S.A.
Consultant and Actuary
Gabriel Roeder Smith & Company
SCOPE OF SERVICES
A detailed analysis of the work plan for this project.
WORK PLAN
Having performed over 500 OPEB actuarial valuations under GASB 45, GRS has a
well-established track for the process.
Step 1 -Collect Employee and Retiree Census Data and Benefit Plan Data
Census data will be requested from the City. The City may need to request certain data
from its own personnel/payroll system and from the health plan vendors. The City may
need to massage or supplement the data obtained from these sources (if necessary) to
provide clean data files (consolidated) and confirm the completeness and accuracy of
the data.
Information on the Benefit Plans, loss ratios, renewal reports, experience rating,
worksheets, rate charts, etc., will be required from the respective health plan vendors in
order to develop the initial per capita retiree claims cost for the benefit types.
Step 2 -Draft and Approve Substantive Plan Provisions
GASB Statement No. 45 requires the actuarial valuation of City-provided other post-
employment benefits, as constituted in the substantive plan -the plan terms as
understood by the parties (the City and the members). This may be the most important
step of the whole process. Since the program has previously been valued under GASB
45, this may simply involve updating the sample Summary of Plan Provisions included
with the Engagement Letter.
This may require us to obtain memoranda, documents, etc., which describe all the
benefits provided. We must identify those benefits that qualify as City-provided other
post-employment benefits -and the eligibilities and conditions under which they are
made available. We will draft a written version of the substantive plan and request City
confirmation before proceeding.
Step 3 -Develop Initial Per Capita Claim Costs
Each relevant benefit type needs an initial per capita cost for the group. This is the
baseline starting point for the project and requires short-term health actuarial expertise.
Short-term because the initial per capita claim cost is the total underlying cost (not
necessarily the premium) expected for the year following the valuation date for all
employees and retirees under age 65.
Gabriel Roeder Smith & Company
SCOPE OF SERVICES
Fully insured premiums are blended premiums used for active and pre-age 65 retired
members. These premiums are adjusted to reflect differing utilization by age and
gender, using the most recent enrollment, into a single composite pre-age 65 retiree cost
using the Redden and Anders comprehensive health care database. This single
composite pre-65 retiree cost is then converted to age-and gender-specific retiree costs
reflecting morbidity.
Fully insured premiums for age 65 and above retired members are adjusted to reflect
differing utilization by age and gender, due to the impact of the Medicare program,
using the most recent enrollment, into a single composite age-65-and-above retiree cost
using the Redden and Anders comprehensive health care database. This single
composite age-65-and-above retiree cost is then converted to age-and gender-specific
retiree costs reflecting morbidity.
The premium developed by the preceding process is appropriate for the unique age and
gender distribution currently existing. Over the future years covered by this valuation,
the age and gender distribution will most likely change. Therefore, our process
distributes the average premium over all age/gender combinations and assigns a unique
cost for each combination. This process more accurately reflects health care costs in
the retired population over the projection period.
It is important to note that your claim costs will be developed under the direction of
John Mallows, F.S.A. -a fully qualified dedicated health care actuary.
Step 4 -Calculate All Projected Benefits and Present Values
The future years' expected costs for all currently covered retirees and dependents is
projected based on select and ultimate health care trend assumptions for each benefit
type. We will set up our long-term actuarial modeling system based upon the Summary
of Substantive Plan Provisions. Part of this step is recognition of how the City's
Pension Plans play an integral part in its OPEB obligation. Naturally, we will use all
the retirement eligibility requirements of the City's pension plans for normal, early,
duty and non-duty disability and death, as applicable. Initially, we may use all of the
demographic actuarial assumptions (such as turnover, retirement, disability and
mortality rates) used by the City's pension plans-it may not be proper to simply pull
such rate tables off the shelf since the pension plans perform actuarial experience
studies to set the rate tables reflecting the City's own demographic experience.
Use of the City's pension plans demographic assumptions should be considered a
minimum requirement for a proper actuarial valuation of the City's OPEB costs and
liabilities.
Gabriel Roeder Smith & Company
SCOPE OF SERVICES
In the end, the assumptions and methods employed are the City's assumptions and
methods. They are to be adopted by the City because they are the basis for entries in
the City's financial statements. We will advise City staff concerning the assumptions
and methods. To that end, we will conduct conferences with key staff regarding these
actuarial assumptions and methods to be used in the valuation.
All future years' benefit costs are projected and taken back to today's dollars in a
present value. These actuarial present values of expected benefits payable form the
basis for the accounting entries and disclosures required under GASB Statement No.
45.
We will advise officials (particularly those in finance and treasury) concerning how
they would be setting the discount rate. Ultimately, all actuarial assumptions and
methods are chosen or adopted by the City. Part of our role is to advise City
management on such matters.
Step 5 -Calculate Expense and Liabilities
We will calculate these expense and liability disclosures under a pay-as-you-go
(unfunded) basis and discuss options for advance funding.
Step 6 -Prepare Draft Report for Review
GRS will prepare a draft version of our Actuarial Valuation Report and submit it to the
City for initial review and comments. Our draft report will include 3-year projections
on an unfunded basis, including cash flow and expense. The results will be aggregated
with totals. .
The draft report will also include an Executive Summary, tables or charts presenting the
development of the results, a description of all primary actuarial assuinptions and
methods and a summary of the program benefits. Our report will include the issuance
of a Statement of Actuarial Opinion (SAO) in accordance with the Qualification
Standards of the American Academy of Actuaries.
Step 7 -Finalize Report
After discussion regarding the draft report, we will make changes and issue our formal
bound Report to the City.
Various telephone conferences may be required or advisable as the project proceeds -
for the purposes of clarification, education (of GRS and City personnel) and decisions
by the City as to the usage of certain assumptions and methods.
Finally, we will deliver the final version of our Actuarial Valuation Report via hard
copy and an electronic copy.
Gabriel Roeder Smith & Company
FLORIDA LEAGUE OF CITIES, INC.
301 South Bronough Street, Suite 300 • Post Office Box 1757 • Tallahassee, FL 32302-1757
(850) 222-9684 • Fax (850) 222-3806 • Web site: www.flcities.com
May 17, 2012
Mr. Alfredo Riverol
Chief Financial Officer
City of South Miami
Re: Preparation of GASB 45 Disclosures for the City of South Miami
Dear Mr. Velez:
Pursuant to your request, I have set forth below our fee to provide the actuarial calculations required by
Governmental Accounting Standards Board Statement No. 45 (GASB 45), along with a detailed listing of the
services covered by the fee.
It is my understanding that the City currently: (i) has approximately 160 active employees who potentially
may become eligible for post-employment benefits; (ii) has approximately 8 individuals who are receiving
post-employment healthcare coverage; and (iii) provides fully-insured post-employment healthcare benefits.
Based on our email conversation and my understanding of the number of employees and retirees entitled to
post-employment benefits, as well as the type of post-employment benefits currently offered by the City of
South Miami, I have prepared the following fee quotation.
Our fixed retainer fee will be $7,875.00 for the following services:
1. Preparation of an annual actuarial valuation report as of April 1, 2012 which will be used to develop the
GASB 45 liabilities and expense for the fiscal years ending September 30, 2012, September 30, 2013 and
September 30, 2014, complete with all necessary calculations, information, and disclosures as required by
GASB 45 and other applicable actuarial professional standards, including the following:
a. A summary of current plan provisions;
b. A summary of all assumptions and methods applied in developing the plan expense and liabilities;
c. Liabilities and expenses by employee group based on covered medical benefits;
d. Liabilities by active, deferred vested, retiree, and beneficiary status; and
e. A projection of the cash flows to provide a forward-looking estimate of the financial impact to the City
of South Miami of retiree health care costs, liabilities, and contributions.
2. Up to 15 bound copies of the final valuation report prepared as described in item 1.
3. Miscellaneous telephone calls between our actuary, Charles Carr at Southern Actuarial Services and any
City employees or other professionals connected with the cited work, including conference telephone calls
as needed to discuss the assumptions used in the calculations and to explain the results of the valuation to
City officials.
The report will be provided approximately 12 weeks from the date on which we receive all necessary
information, including but not limited to employee and retiree data, claims experience (if applicable), retiree
premiums, City contributions and/or premiums, and other information set forth in our standard data request
letter.
In addition, if you would like for the actuary to attend a meeting in person to discuss the results of the
valuation, the fee will be $2,500.00. The cited meeting attendance fee includes all associated travel
expenses. The $2,500.00 fee is in addition to the fixed retainer fee of $7,875.00.
If you have any questions concerning the above, please do not hesitate to call me.
If you agree to this proposal, please have this signed and dated by the appropriate official and send a copy to
me.
Signature
Printed Name
Sincerely,
Dustin Heintz
Investment and Retirement Services Manager
Florida League of Cities, Inc.
P.O. Box 1757
Tallahassee, FL 32302
800-616-1513 x 3614
Title
Date
Proposal ~ ~ , ~ , , ' , ~
GASB45
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
Hliman
Milliman Proposal
TABLE OF CONTENTS
A. Milliman's Actuarial Consulting Services
B. GASB 45 Analysis -Project Steps
C. Project Team
D. Fee Schedule
Exhibit 1 -Milliman 2012 Fact Sheet
Exhibit 2 -Sample Client List
Exhibit 3 -Requested Information
Exhibit 4 -Service Agreement
Exhibit 5 -Business Associate Agreement (HIPAA Compliance)
GASS 45
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
3
5
7
9
10
11
14
16
17
2
Milliman Proposal
A. MILLIMAN'S ACTUARIAL CONSULTING SERVICES
Milliman differentiates itself in the delivery of actuarial consulting services by seeking out
and developing professionals who are not only technically sound, but who can also
communicate complex actuarial and accounting concepts in an understandable way. As a
result, we bring measurable value to our client's ability to make sound decisions.
Public Sector Experience
Milliman is nationally recognized for our substantial commitment to the public sector, which
includes publication of our PERiScope newsletter, active participation in national meetings
and advisory committees, and the funding of specialized research. With one of the largest
groups of public-sector clients in the U.S., our consultants are extremely well versed in the
GASB standards relating to post-employment benefit arrangements. They are also mindful
of the impact that state and local law has on public employer benefit plans as they consider
and analyze the effect that applicable law may have on current and future liabilities.
We have been retained by numerous public employers to perform GASB 45 valuations and
consult on issues related to GASB 43 and 45 (please see Exhibit 2 for a representative
client list).
Milliman also provides a broad range of other services to public plan sponsors, including
actuarial services, benefits consulting, compliance, recordkeeping, employee
communication and investment advisory services.
Health and Welfare Expertise
For many years, our Health Practice has been considered the premier provider of health
actuarial services in the U.S. This expertise and experience are particularly important since
employers' GASB 45 liability is highly dependent on the cost structure of the health plan
offered to its retirees and due to anticipated medical inflation.
In addition to serving as actuary for some of the nation's larger healthcare providers,
Milliman's healthcare group publishes the Healthcare Cost Guidelines, an invaluable tool for
developing per capita claims costs and medical inflation assumptions for post-employment
medical benefit valuations. The Guidelines were first developed in 1954 as a result of
Milliman's continuing research on healthcare costs and the publication has been updated
and expanded annually ever since and are continually monitored as they are utilized in
measuring the experience and evaluating the rates of our clients, and comparing the
information to other data sources.
The Guidelines also provide a flexible but consistent basis for the determination of claim
costs for a wide variety of health benefit plans and may be used to estimate future claim
levels, set provider budgets, set service category budgets, evaluate past experience, and
establish interrelationships between different health coverages.
Independence
Recognized as an industry leader, Milliman is an independent firm of consultants and
actuaries. We are not affiliated with other organizations that might impair our objectivity or
our focus on your needs. We deliver top-quality service because our flexible internal
structure allows us to assemble collaborative project teams that provide broad expertise
under the guidance of an assigned consultant who understands the City of South Miami and
your unique needs.
GASB 45
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
Milliman has clients across
the entire spectrum of public
sector organizations,
including:
mI City, County and State
Governments
WI School Districts
mI Law Enforcement
Agencies
mI Hospital Districts
WI Transportation
Authorities
mI Power and Utilities
Organizations
Milliman Proposal
-----,-----
State-of-the-Art Valuation System
Milliman has developed a state-of-the-art valuation system for GASB 45 valuations that
allows our consultants to effectively analyze and maintain data, produce valuation results
and project anticipated future GASB costs. Because no two plans are alike, our system is
flexible. Accordingly, we are equipped to serve all types of clients with a broad spectrum of
plan designs.
Client Commitment
We have worked hard to eam the trust of our public-sector clients by being very
approachable and accessible, using technology to simplify and support all services, and by
delivering on our commitments. We intend to follow the same client service model for the
City of South Miami and earn the same high level of trust.
GASB 45
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
4
Milliman Proposal
B. GASB 45 ANALYSIS -PROJECT STEPS
Assess Your Needs
The GASB 45 analysis is expected to accomplish the following objectives:
1. Oata Collection -We will gather requested information from the City of South Miami
related to other post-employment benefits (OPEBs) offered to retirees. This will
include the prior actuarial valuation report, so that we may assess the reasonability of
the baseline assumptions and valuation results. Upon the review of the prior
valuation, we will discuss any proposed changes in advance of completing the
updated results.
2. Valuation -We will perform calculations in accordance with GASB guidance and
current actuarial standards of practice. Key computations will include the OPEB
liability, the annual required contribution, and projected future benefit payments.
3. Sensitivity Analysis -We will provide sensitivity analysis to demonstrate the impact of
variation in the assumed discount rate and other key assumptions. This information
will be valuable in identifying the key drivers of expected cost associated with
providing OPEBs to retirees.
4. Meeting to Present Results -We will meet with you via WebEx or Conference Call to
present valuation results and discuss important issues.
5. Financial Statement Preparation -We will assist your auditors, as necessary, to review
the GASB 45 section of the financial statement to assure that the disclosed information
is consistent with our valuation results.
Strategy and Implementation
Based on conclusions drawn from the valuation, we will be ready to discuss next steps.
Those next steps typically include analysis of strategies you may want to explore prior to the
effective date of disclosing GASB 45 information in employer financial statements. Key
considerations may include:
• The effect of potential plan design changes on GASB cost
• The impact of changes in employee cost-sharing provisions
• Whether advance funding of benefits in a trust is appropriate
Ongoing Reporting
After completion of the valuation and additional analysis, as needed, we will be well-
positioned to provide OPEB valuations on an ongoing basis as required under GASB 45.
The steps involved in performing ongoing valuations will be similar to the steps described
above for this valuation, except in the case where a more simplified approach may be used
for interim valuations. Following completion of the valuation, we will meet with you to
discuss results and follow with issuance of a formal valuation report.
Services Agreement
A service agreement is provided as Exhibit 4. If you wish to engage us to provide the
GASB 45 consulting services as described herein, please sign this document and return the
agreement to us. We will then sign the agreement, provide a copy to you and begin work
on the project.
GASB 45
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
Milliman Proposal
To complete your valuation, we will need certain census and plan information. The
enclosed Exhibit 3 provides a list of this information.
Timing for Completion of Valuation
From the time we receive the requested information and a completed service agreement,
we expect to complete your valuation within six to eight weeks and schedule a meeting to
discuss the results with you.
GASS Analysis Timeline
o 2 3 4 5 6 7 8
Weeks
GASB 45
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
fill Data Collection
III Valuation
o Sensitivity Analysis
o Meeting to Present Results
9
Milliman Proposal
C. PROJECT TEAM
Consulting Actuary
Mr. McGrath is a principal and the Employee Benefits practice leader in the Atlanta office of
Milliman. He joined the firm in 1982. His areas of expertise include pension, savings
programs, and post-retirement medical plans. His consulting activities focus on design,
funding, implementation, and ongoing administration of these employee benefit plans.
Mr. McGrath also has extensive experience with other types of employee benefit plans,
including life, medical, and disability programs. His clients include a variety of public and
private organizations. He is a frequent speaker on employee benefit plans before
professional groups and trade organizations, including lecturing on retirement plans for
Georgia State University under the Certified Employee Benefits Specialist curriculum.
Professional Designations
• Fellpw, Society of Actuaries
• Enrolled Actuary under ERISA
• Member, American Academy of Actuaries
Degrees
• BS (Management Science) -Georgia Institute of Technology
Support Actuary
Mr. Jaramillo is an actuarial associate with the Atlanta office of Milliman. Mr. Jaramillo
practices in the employee benefits field, working with defined benefit and post-retirement
medical plans
In addition to preparing and analyzing actuarial valuations, Mr. Jaramillo assists pension
and post-retirement medical plan sponsors in quantifying the financial risk associated with
such plans.
Professional Designations
• Associate, Society of Actuaries
• Member, American Academy of Actuaries
• Enrolled Actuary
Degrees
• BS (Mathematics), Tulane University
GASS 45
Proposal to Provide GASS 45 Analysis for the City of South Miami
June 18, 2012
Mike McGrath
FSA, MAAA, EA
Consulting Actuary
Sebastian Jaramillo
ASA, MAAA, EA
Support Actuary
7
Milliman Proposal
Health Actuary
Ms. Noonan is an Actuarial Consultant with the Employee Benefits Health and Welfare
practice in the Dallas office. As a credentialed actuary, Stephanie is responsible for
actuarial reports and analysis for medical, dental, life, disability, paid time off, and other
ancillary plans. Stephanie's main responsibility is direct consulting to large employers. She
also assists on our platform of services for fully insured plans.
Prior to joining Milliman in 2007, Stephanie had almost 10 years of extensive actuarial
experience in the insurance industry working in areas such as asset / liability management,
financial reporting, and product development. Her primary areas of expertise include:
• Asset / Liability cash flow testing
• Asset / Liability duration / convexity studies
• Due Diligence
• Valuation of liabilities for insurance and annuities
• Price / Develop insurance and annuity products
• XXX / AXXX reserve financing
In her current position as an Actuarial Consultant, Stephanie specializes in the following:
• Large, complex actuarial projects such as HP Assist, FSA Assist
• Calculating IBNR reserves
• Benchmarking plan designs and recommending changes
• Calculating the value of plan design changes using Milliman's proprietary actuarial
cost model, Health Cost Guidelines and Dental Cost Guidelines
• Performing retiree medical valuations (FASB / GASB)
• Evaluating the feasibility of self-insurance
• Performing Medicare Part D Attestations
Professional Designations
• Fellow, Society of Actuaries
• Chartered Enterprise Risk Analyst
• Member, American Academy of Actuaries
Education
• BS, Biology / Chemistry / Mathematics, college of Saint Mary, Omaha, NE
GASB 45
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
Stephanie M. Noonan
FSA, CERA, MAAA
Health Actuary
Milliman Proposal
D. FEE SCHEDULE
Fee Assumptions
The estimated fees are based on the following assumptions:
• There are approximately 134 active employees
• There are approximately 4 retirees and beneficiaries
• There is one medical option available to retirees
• Data provided is usable without audit or significant follow up
Estimated Fees
Phase Fee*
• Full Valuation -2012 $9,000
• Full Valuation -2015 $8,500
• Plan Design and Funding Analysis Provided as needed and based on scope
If a material difference in fees becomes evident due to a change in the scope of the
assignment, we will advise you. Travel and other out-of-pocket expenses are billed
separately.
*If you prefer that Milliman make an on-site final presentation, our fees will be an additional
$1,000 (out-of-pocket travel expenses to be billed separately).
GASB 45
Proposal to Provide GASS 45 Analysis for the City of South Miami
June 18, 2012
Milliman Proposal
EXHIBIT 1 -MILLIMAN FACT SHEET
GASS 45
in 2012
Milliman is among the world's largest independent
firms. With more than employees and revenues of million in
201 i, firm serves full spectrum governmental,
Milliman was founded in i 941 and today has 55 in
cities worldwide, covering in North America, latin America,
and the Pacific, and the Middle
Primary practice areas
• Employee benefits, investment, .and compensation Consulting services
• Health consulting services and Miliiman eare Guidelines
Lile and financial consulting services
• Property and casualty consulting services
Organization
Milliman is owned and managed by approximately 400 principals, who have been elected in recognition of their technical,
professional. and business achievements.
Leadership
Patridd. Grannan, president and CEO
Bradley M. Smith, chalmlan
Firm highlights
Our consultants. have served in leading roles in the actuarial profession, including as presidents of the American Academy of
Actuaries, the Brazilian Institute 01 Actuaries, the Casualty Actuarial Society, the Institute of Actuaries, and Ihe Society of Actuaries.
and as board members for the Institute of Actuaries of India, the Staple Inn Actuarial Society, The Actuarial Foundation, and the
Actuarial Standards Board .. Currently, Miltiman Chairman Brad Smith is president of the Society of Actuaries, Rajish Sagoenie is
president of the Dutch Actuarial Association, Gary Josephson is president-elect of the Casualty Actuariat Society, and Eduardo lara
is presidenl-elect of the Mexican Association of Actuaries.
Milliman is the leading provider 01 actuarial and related products and serVices to insurance markets worldwide.
mi!!irnBfl,.cocn
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
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Milliman Proposal
EXHIBIT 2 -REPRESENTATIVE GASB 45 CLIENTS IN YOUR AREA
Alabama • Santa Rosa County School Board
• City of Athens • St. John River Water Management District
• City of Florence • St. Lucie County School Board
• City of Gadsden • State of Florida
• City of Montgomery • Southwest Florida Water Management
• City of Scottsboro • Sumter County
• Montgomery County • Union County School Board
Arkansas • Village of North Palm Beach
• Arkansas Tech University Georgia
• State of Arkansas • Bartow County
Florida • Camden County
• Bay County • City of College Park
• City of Apopka • City of Smyrna
• City of Dania Beach • Consolidated Government of Columbus
• City of Eustis • Georgia Ports Authority
• City of Haines City • Gordon County
• City of Madeira Beach • Troup County
• City of Miami Louisiana
• City of North Port • 16th Judicial District Court
• City of Ocoee • Acadia Parish School Board
• City of Port St. Lucie • Allen Parish School Board
• Escambia County • Allen Parish Sheriffs Office
• Gulf Co.unty • Assumption Parish Sheriffs Office
• Jacksonville Aviation Authority • Bayou Lafourche Freshwater District
• North Naples Fire Control & Rescue • Caddo Parish School Board
• Okaloosa County • Calcasieu Parish Police Jury
• Pinellas Juvenile Welfare Board • Calcasieu Parish Sheriffs Office
• Putnam County • Calcasieu Parish School Board
GASB 45 11
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
Milliman Proposal
_________ ~_~~ ___ M~~~_~ __ ~~~ ____ '"
--.~~-.. ~
Louisiana (cont'd) • Lafayette Parish Sheriffs Department
• Caldwell Parish School Board • Lake Charles Harbor & Terminal District
• City of Abbeville • LaSalle Parish School Board
• City of Baton Rouge • Lincoln Parish School Board
• City of Bunkie • Livingston Parish Sheriffs Office
• City of DeRidder • Louisiana Assessor's Association (50 offices)
• City of DeQuincy • Madison Parish School Board
• City of Lake Charles • Madison Parish Sheriffs Office
• City of Leesville • Monroe City Schools
• City of Scott • Morehouse Parish School Board
• City of Ville Platte • Ouachita Parish Police Jury
• Claiborne Parish Schools • Plaquemines Parish School Board
• Concordia Parish School Board • Plaquemines Parish Sheriffs Office
• DeSoto Parish Schools • Rapides Parish Library
• East Baton Rouge Parish Sheriffs Office • Rapides Parish Police Jury
• East Carroll Parish School Board • Red River Parish Sheriffs Office
• East Feliciana Parish Sheriffs Office • Richland Parish School Board
• Evangeline Parish Assessor's Office • Richland Parish Sheriffs Office
• Evangeline Parish School Board • St. Charles Parish School Board
• Evangeline Parish Sheriffs Office • St. Charles Parish Sheriffs Office
• Franklin Parish School Board • St. Helena Parish School Board
• Grant Parish School Board • St. James Parish Sheriffs Office
• Greater New Orleans Expressway Commission • St. John the Baptist Parish Sheriffs Office
• Iberia Parish Sheriffs Office • St. Landry Parish Sheriffs Office
• Iberville Parish Sheriffs Office • St. Martin Parish Schools
• Jackson Parish School Board • St. Martin Parish Sheriffs Office
• Lafayette Parish Clerk of Court • St. Mary Parish School Board
• Lafayette Parish School System • Tangipahoa Parish Government
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GASB 45 12
Proposal to Provide GASS 45 Analysis for the City of South Miami
June 18, 2012
Milliman Proposal
Louisiana (cont'd) • City .of Jasper
• Tangipahoa Parish Con. G. D. Dist. #1 • City of Katy
• Tensas Parish School Board • City of Laredo
• Terrebonne Parish Sheriffs Office • City of Midlothian
• Union Parish School Board • City of Mount Pleasant
• Vermillion Parish Police Jury • City of Plano
• Vernon Parish Clerk of Court • City of Port Arthur
• Vernon Parish Government • City of Temple
• Vernon Parish School Board • City of Webster
• West Baton Rouge Parish School Board • Cameron County
• West Carroll Parish School Board • Collin County
• Winn Parish School Board • Fort Bend County
Oklahoma • Gulf Coast Waste Disposal
• Grand River Dam Authority • Jefferson County
• Oklahoma County Commission • Lower Neches Valley Authority
• City of Owasso • Metropolitan Transit Authority of Harris County
South Carolina • North Texas Municipal Water District
• City of Aiken • Port of Houston Authority
Texas • Potter County
• Bowie County • San Jacinto River Authority
• Brazos County • Tarrant Appraisal District
• Brownsville Public Utilities Board • Texarkana Water Utilities
• Cameron County • Travis County
• City of Allen • Pecos County
• City of Brenham • Port of Corpus Christi Authority
• City of Deer Park • Trinity River Authority
• City of Denton • Williamson County
• City of Euless
GASB 45 13
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
Milliman Proposal
EXHIBIT 3 -REQUESTED INFORMATION
Data is preferred in an electronic format whenever possible.
1. Active employee/retiree information (see layout below)
ACTIVE EMPLOYEE DATA
GASB 45
Data Element
Identification Number
1~,cc~"",C"~,,de (ifapplicable)
~ip~~~e
Gender
Date of Birth
Original Date of Hire
Alpha/Numeric
fl:lph.~L~~I1lE)r,i<; ... ,
Numeric
Format
,., ................... , .................................................................. .
Alpha
mm/dd/yyyy
mm/dd/yyyy
Date of RE)~irE) (ifappli~~~/eL
Date of Termination
, ......................................... I.,.m .... m ...... / ... d .... d/yyXy """,., ...... " ....................................................... .
d/yyyy
Benefit Coverages (medical plan if more than
one, dental etc.)
rv1E)di<;~If"la~[)E)~ig~(f"f"<?1:f"f"0""2"":""""""",,,,'" I"~,'"~"~"~ """",',c" ................ , ..... ,"""', .. ,"""""", ... ,', .. ,"",. I
Identification Number
Group Code (if applicable)
Gender
Date of Birth
Date of Termination
Benefit Coverages
Tier (Employee Only, Employee & Spouse, etc.)
p",rtirin""t Contribution Rate
Benefit Cover~QE)s
rv1e~i<;alf"lan[)E)~iQ~(f"f"<?1:pp<??:E)t<;)
Tier(Employee OnlY,El1l ployee & Spouse, etc.}
Lifel~~ur~~ce(i(~pplic~bleL
Beneficiary Identification Number
KPI'PTlr,,,,'v Date of Birth
Alpha/Numeric ......... , .. , ......... ,................................................................................................ I
Alpha/Numeric ..... ,.,.,', ..... ,"",., .. " .......................... , ....... , .. , ..... ,...................................... I
Alpha
mm/dd/yyyy
,." .. ,', .......................... .
mm/dd/yyyy
Alpha/Numeric
99999999
Alpha/Numeric
mm/dd/yyyy
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
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Milliman Proposal
2. Summary of plan provisions and any plan changes over the past three years.
• Type of Insurance: self-insured, fully insured or partially insured (ASO agreement)
• Medical benefits
Deductible
Co-insurance
Office visit co-pay
Out-of-pocket maximum
• Prescription drug benefits
Copay
Other
• Other post-employment benefits (other than retirement), including life insurance, vision, dental, etc.
• For Medicare eligible retirees
Are all retirees required to enroll in Medicare Parts A and B? Part D?
How does the Plan co-ordinate with Medicare?
Do retirees over 65 continue to receive life insurance, vision, dental, etc?
3. Retiree contribution schedule (or include in active employee/retiree information above, if by individual)
4. Employer contribution schedule (ifinsured)
5. Claims information -24-36 months needed (if self-insured)
• Employee groups -active and retirees/beneficiaries
• Type of benefit -medical, prescription drug, other
• Time period -information for the most recent full year needed; claims information for prior three years preferred
• Data should include:
Monthly/annual employee counts or membership
Claim lags (groups over 2000) or annual paid claims
State if claims are net of stop loss recoveries
Specific and Aggregate Stop Loss premiums and recoveries (if not adjusted in claims)
Administrative expenses
6. Groups not covered by Medicare -if any
7. Most recent pension valuation report (ifavaiJable)
8. Anticipated plan design changes (if applicable)
9. Name and Contact information of your Auditor
GASB 45
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
15
Milliman Proposal
EXHIBIT 4 -CONSULTING SERVICES AGREEMENT
This document will serve as the Service Agreement between Milliman and the City of South Miami for the provision of
actuarial services required to meet GASB 43/45 requirements and other services, as requested.
Terms and Conditions
1. Limitation of Liability. Milliman will perform all services in accordance with applicable professional standards. The parties
agree that Milliman, its officers, directors, agents and employees, shall not be liable to the City of South Miami, under any
theory of law including negligence, tort, and breach of contract or otherwise, for any damages which exceed 3 times the total
professional fees paid in the previous 12-month period. In no event shall Milliman be liable for lost profits of the City of South
Miami or any other type of incidental or consequential damages. The foregoing limitations shall not apply in the event of the
intentional fraud or willful misconduct of Milliman.
2. Disputes. In the event of any dispute arising out of or relating to the engagement of Milliman by the City of South Miami, the
parties agree that the dispute will be resolved by final and binding arbitration under the Commercial Arbitration Rules of the
American Arbitration Association. The arbitration shall take place before a panel of three arbitrators. Within 30 days of the
commencement of the arbitration, each party shall designate in writing a single neutral and independent arbitrator. The two
arbitrators designated by the parties shall then select a third arbitrator. The arbitrators shall have a background in either
insurance, actuarial science or law. The arbitrators shall have the authority to permit limited discovery, including depositions,
prior to the arbitration hearing, and such discovery shall be conducted consistent with the Federal Rules of Civil Procedure.
The arbitrators shall have no power or authority to award punitive or exemplary damages. The arbitrators may, in their
discretion, award the cost of the arbitration, including reasonable attorney fees, to the prevailing party. Any award made may
be confirmed in any court having jurisdiction. Any arbitration shall be confidential, and except as required by law, neither
party may disclose the content or results of any arbitration hereunder without the prior written consent of the other parties,
except that disclosure is permitted to a party's auditors and legal advisors.
3. Choice of Law. The construction, interpretation, and enforcement of this Agreement shall be governed by the substantive
contract law of the State of New York without regard to its conflict of laws provisions. In the event any provision of this
agreement is unenforceable as a matter of law, the remaining provisions shall stay in full force and effect.
4. No Third Party Distribution. Milliman's work is prepared solely for the internal business use of the City of South Miami.
Milliman's work may not be provided to third parties without Milliman's prior written consent. Milliman does not intend to
benefit any third party recipient of its work product, even if Milliman consents to the release of its work product to such third
party.
5. Terms of Agreement. This Agreement will become effective upon the signature of both parties, and will remain in effect until
terminated by either party as provided herein. Either party may terminate this Agreement upon ninety (90) days prior written
notice. Milliman will retain any records it has relating the Services provided under this Agreement for a period of three years
following the termination of this Agreement.
This Service Agreement will take effect upon the signature of both parties below.
CITY OF SOUTH MIAMI
I have read and agree to the terms and conditions
of this Agreement.
Accepted by:
Printed Name: _______________ _
Title: Date: ______ _
GASB 45
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
MILLIMAN, INC.
I have read and agree to the terms and conditions
of this Agreement.
Accepted by:
Printed Name:
Title: Principal Date:
16
Milliman Proposal
EXHIBIT 5 -BUSINESS ASSOCIATE AGREEMENT (HIPAA COMPLIANCE)
MILLIMAN, INC.
BUSINESS ASSOCIATE AGREEMENT
This BUSINESS ASSOCIATE AGREEMENT ("Agreement") is entered into effective the _ day of _____ _
2012 by and between the City of South Miami ("Client") and Milliman, Inc. ("Milliman").
RECITALS
A. Client is a Covered Entity as defined under the Health Insurance Portability and Accountability Act of 1996
("HIPAA") and is therefore subject to HIPAA and its implementing regulations, including the Standards for Privacy of Individually
Identifiable Health Information (the "Privacy Rule") and the Security Standards for the Protection of Electronic Protected Health
Information (the "Security Rule"), and Subtitle D of the Health Information Technology for Economic and Clinical Health Act
("HITECH") enacted as part of the American Recovery and Reinvestment Act of 2009 (collectively, HIPAA, the Privacy Rule,
Security Rule and HITECH shall be referred to herein as the "HIPAA Regulations").
B. Protected Health Information received from Client or created or received by Milliman on behalf of Client ("PHI")
may be needed for Milliman to perform the services (the "Services") requested by Client and described in any underlying
agreement between the parties (the "Underlying Agreement").
C. To the extent Milliman needs to access PHI to perform the Services, it will be acting as a Business Associate of
Client and will be subject to certain provisions of the HIPAA Regulations.
D. Milliman and Client wish to set forth their understandings with regard to the use and disclosure of PHI by
Milliman so as to comply with the HIPAA Regulations.
AGREEMENTS
In consideration of the Recitals and the mutual agreements below, the parties agree as follows:
1. Defined Terms. Capitalized terms used, but not otherwise defined, in this Agreement shall have the same
meaning as those terms in the HIPAA Regulations.
2. Milliman's Obligations and Permitted Activities.
(a) Milliman agrees to not use or further disclose PHI other than as required to perform the Services,
requested by Client or Required By Law, or as otherwise permitted herein.
(b) Milliman agrees to use reasonable safeguards to prevent use or disclosure of PHI other than as
provided for by this Agreement, and shall develop, implement, maintain and use appropriate administrative procedures, and
physical and technical safeguards, to reasonably preserve and protect the confidentiality, integrity and availability of electronic
PHI.
(c) Milliman agrees to report to Client, without unreasonable delay and in no case later than five (5)
business days following actual knowledge by Milliman:
(i) Any use or disclosure of PHI not provided for by this Agreement.
(ii) Any Security Incident of which Milliman becomes aware; provided, however, that the parties
acknowledge and agree that this section constitutes notice by Milliman to Client of the ongoing existence and occurrence of
attempted but Unsuccessful Security Incidents of which no additional notice to Client shall be required. Unsuccessful Security
Incidents shall include, but not be limited to, pings and other broadcast attacks on Milliman's firewall, port scans, unsuccessful log-
on attempts, denials of service and any combination of the above, so long as such incidents do not result in unauthorized access,
use or disclosure of Client's electronic PHI.
~~~~------~~~~----.-.. -~~---
GASB 45
Proposal to Provide GASB 45 Analysis for the City of South Miami
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Milliman Proposal
, _______ m'_"" _____ , _______ m ___ "' ______________ , ___ ,_, ____________ _
(iii) Any Breach of Unsecured PHI, as defined in 45 CFR 164.402, Following the initial notification
of any such Breach, Milliman shall provide a report to Client that includes, to the extent possible: [A] a brief description of what
happened, including the date of occurrence and the date of the discovery by Milliman; [B] a description of the PHI affected,
including the names of any Individuals whose PHI has been or is reasonably believed to have been accessed, acquired or
disclosed and the types of PHI involved (such as full name, social security number, date of birth, home address, account numbers,
etc,); and [C] a brief description of what Milliman has done to investigate the Breach, to mitigate harm to Individuals, and to protect
against any further Breaches, Milliman also shall provide to Client any other available information Client is required to include in
its notification to affected Individual(s),
(d) Milliman agrees to ensure that any agent or subcontractor to whom it provides PHI agrees to the same
or substantially similar restrictions and conditions as those that apply to Milliman through this Agreement with respect to such PHI.
(e) Milliman shall make its internal policies, procedures and records relating to the use and disclosure of
PHI reasonably available to the Secretary or to Client if necessary or required to assess Milliman's or the Client's compliance with
the HIPAA Regulations,
(f) It is not anticipated that Milliman will maintain a Designated Record Set on behalf of Client; however, if
Milliman maintains a Designated Record Set on behalf of Client, Milliman agrees to, at Client's written request: (i) provide access
to such PHI in order to assist Client in meeting its obligations under the Privacy Rule, and (ii) make any amendment(s) to such
PHI as Client so directs or agrees to pursuant to the Privacy Rule,
(g) So that Client may meet its disclosure accounting obligations under the HIPAA Regulations, Milliman
agrees to document disclosures of PHI made by Milliman which are not excepted from disclosure accounting reqUirements under
the HIPAA Regulations,
(h) Milliman may use PHI for Milliman's proper management and administration or to carry out its legal
responsibilities, Milliman may disclose PHI for Milliman's proper management and administration, provided that: (i) Milliman
obtains reasonable assurances from the person to whom PHI is disclosed that it will remain confidential and used or further
disclosed only as Required By Law or for the purpose for which it was disclosed to the person; and (ii) the person notifies Milliman
of any instances of which it is aware in which the confidentiality of PHI has been breached, Milliman also may make disclosures
that are required by law,
(i) Milliman may use PHI to provide Data Aggregation services to Client as permitted by the Privacy Rule,
(j) Milliman may, at its option:
(i) Deidentify PHI in accordance with the requirements of the Privacy Rule and maintain such
deidentified health information indefinitely; provided that all identifiers are destroyed or returned in accordance with this
Agreement
(ii) Create a Limited Data Set for the purpose of providing the Services, provided that Milliman:
[a] Does not use or further disclose PHI contained in the Limited Data Set except as
necessary to provide the Services or as provided for in this Agreement or otherwise Required By Law;
[b] Uses appropriate safeguards to prevent the use or disclosure of PHI contained in the
Limited Data Set other than as provided for by this Agreement;
[c] Reports to Client any use or disclosure of PHI contained in the Limited Data Set of
which Milliman becomes aware that is not provided for by this Agreement;
[d] Ensures that any agents or subcontractors to whom it provides access to the Limited
Data Set agree to the same restrictions and conditions that apply to Milliman under this Agreement; and
[e] Does not re-identify PHI or contact the Individuals whose information is contained
within the Limited Data Set
3, Client's Obligations,
(a) Client shall not request Milliman to use or disclose PHI in any manner that would not be permissible
under the Privacy Rule or the Security Rule if done by Client
(b) Client shall not provide Milliman with more PHI than that which is minimally necessary for Milliman to
provide the Services and, where possible, Client shall provide any PHI needed by Milliman to perform the Services in the form of a
Limited Data Set, in accordance with the HIPAA Regulations,
____ ' ___ m _________________ _
GASS 45
Proposal to Provide GASB 45 Analysis for the City of South Miami
June 18, 2012
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Milliman Proposal
(c) Client shall clearly and conspicuously designate all PHI as such before providing it to Milliman.
(d) Client acknowledges and agrees that neither this Agreement nor the Underlying Agreement requires
Milliman to make any disclosure for which an accounting would be required under the HIPAA Regulations. Client further agrees
that it shall be solely responsible for tracking and providing Individuals an accounting of any disclosures made by Client to
Milliman.
(e) Client acknowledges and agrees that the provisions of section 2U)(ii) of this Agreement shall constitute
a Data Use Agreement between the parties.
4. Term and Termination.
(a) Term. This Agreement shall be effective as of the date first written above, and shall terminate when all
PHI is destroyed or returned to Client. If Milliman determines, in accordance with subsection 4(c)(ii) below, that it is infeasible to
return or destroy PHI, the protections of this Agreement with respect to such PHI shall remain in effect until such PHI is returned
or destroyed.
(b) Termination. Upon a party's knowledge of a material breach by the other party, the nonbreaching party
shall either:
(i) Provide an opportunity for the breaching party to cure the breach or end the violation and
terminate this Agreement if the breaching party does not cure the breach or end the violation within the time specified by the
nonbreaching party; or
(ii) Immediately terminate this Agreement if the breaching party has breached a material term of
this Agreement and cure is not possible.
(c) Effect of Termination.
(i) Except as otherwise provided in subsection 4( c)(ii) below, upon termination of this Agreement
for any reason, Milliman shall return or destroy all PHI. This provision shall also apply to PHI that is in the possession of
subcontractors or agents of Milliman.
(ii) If Milliman determines that returning or destroying any or all PHI is infeasible, the protections
of this Agreement shall continue to apply to such PHI, and Milliman shall limit further uses and disclosures of PHI to those
purposes that make the return or destruction infeasible, for so long as Milliman maintains such PHI. Client hereby acknowledges
and agrees that infeasibility includes Milliman's need to retain PHI for purposes of complying with its work product documentation
standards.
5. Miscellaneous.
(a) Regulatory References. A reference in this Agreement to a section in the HIPAA Regulations means
the section as in effect or as amended, and for which compliance is required.
(b) Amendment. Upon the effective date of any final regulation or amendment to the HIPAA Regulations,
this Agreement shall be deemed automatically amended so that the obligations it imposes on the parties remain in compliance
with such regulations. Following amendment of the Agreement in this manner, the parties shall, as necessary, work together to
clarify their respective obligations with respect to any new requirements under the modified HIPAA Regulations.
(c) Independent Contractors. Milliman and Client are independent contractors and this Agreement will not
establish any relationship of partnership, joint venture, employment, franchise or agency between Milliman and Client. Neither
Milliman nor Client will have the power to bind the other or incur obligations on the other party's behalf without the other party's
prior written consent, except as otherwise expressly provided in this Agreement.
(d) Conflicts. In the event that any terms of this Agreement are inconsistent with the terms of the
Underlying Agreement, then the terms of this Agreement shall control.
(e) Entire Agreement. This Agreement shall constitute the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements, oral or written, and all other communications between
the parties hereto relating to such subject matter.
GASB 45
Proposal to Provide GASB 45 Analysis for the City of South Miami
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Milliman Proposal
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above.
MILLIMAN, INC. CITY OF SOUTH MIAMI
By __________________________ ___ By __________________________ __
Title _______________ _ Title ______________ _
GASB 45 20
Proposal to Provide GASB 45 Analysis for the City of South Miami
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