Agent agreement
This Agreement is made of the “effective date” between PRIORITY HEALTH, a Michigan nonprofit corporation and health maintenance organization (“Priority Health”), PRIORITY HEALTH MANAGED BENEFITS, INC., a Michigan corporation
and licensed third party administrator (“PHMB”), and PRIORITY HEALTH INSURANCE COMPANY, a Michigan insurance company (“PHIC” and, together with Priority Health and PHMB, each, a “Company” and, collectively, the “Companies”) and
Licensed Agent listed above.
RECITALS
1. Priority Health has a certificate or authority to operate a health maintenance organization, offering fully funded group benefit plans (the “Fully-Funded Plans”) and group and individual Medicare Advantage and Medicare Supplement (Medigap) plans (collectively, the “Medicare Plans”).
2. PHMB is a licensed third party administrator, providing administrative services for self-funded plans (“Self-Funded Plans”).
3. PHIC has a certificate of authority to operate an insurance company, offering group and individual health benefit plans (the “Insurance Plans” and, together with Fully-Funded Plans, the Medicare Plans and Self-Funded Plans, the
“Plans”).
4. Licensed Agent (“Agent”) is licensed in the State of Michigan to market or sell health benefit plans.
5. Agent has been or will be designated as the Agent of Record by certain employers or groups (“Groups” or, individually,
a “Group”) or by individuals (“Individuals” or, individually, an “Individual”) purchasing the Plans.
6. The Companies and Agent desire to enter into this Agreement according to which Agent shall market the Plans and the Companies shall compensate Agent for Agent’s services.
7. Agent is a “Business Associate” of the Companies, as such term is defined by federal regulations promulgated under the Health Insurance Portability and Accountability Act of 1996 (as amended, “HIPPA”).
ACCORDINGLY, the parties agree as follows:
1. Services to the Companies
1.1 The Companies authorize Agent to represent, and Agent agrees to represent, the Companies in the marketing of the Commercial Plans to Employer Groups (“Schedule A”), of the Individual Plans (“Schedule B”), of the Medicare Plans (“Schedule C”), and of the Medicare Supplement Plans to Individuals (“Schedule D”), collectively (“Schedules”) listed in the Schedules attached hereto. In representing the Companies in the marketing of the Plans, Agent shall:
1.1.1. Only utilize sales material, including advertising materials, authorized by the Companies,
1.1.2. Adhere to all policies, rules and regulations provided by the Companies or their representatives to Agent in writing, as that term is defined in Section 15.3 below, with regard to sales or marketing (including, without limitation, such policies, rules and regulations contained in the Schedule(s) executed in connection with this Agreement),
1.1.3. Complete any Federal or State marketplace requirements for marketing Plans listed in Schedules to this Agreement, including annual certification for authority to market Medicare Plans (“Schedule C”),
1.1.4. Make no misrepresentations concerning the Companies, the Plans, or any related matter.
1.2. Agent agrees to maintain an Agent Center account at priorityhealth.com (the “Agent Center”). At the Companies’ Agent Center website, Agent will have access to renewal information, commission statements, news about the
Companies and updates to policies and procedures. Policies, procedures and guidelines for establishing new groups, renewing existing groups or presenting products of the Companies to groups and individuals can be accessed. Agent
understands that use of the Agent Center is a privilege under this Agreement and information contained within it is confidential. If Agent desires to allow his or her employees’ access to the Agent Center, Agent must provide the names
of employees for whom access is desired to the Companies. Agent is responsible for promptly notifying the Companies if anyone with access to the Agent Center is no longer employed by Agent so that individual’s access can be revoked.
1.3. Agent agrees to follow the Companies’ Code of Excellence, which will promote mutually beneficial relationships among the Companies, Groups, Individuals and the Agent.
1.4. Agent agrees that no Group or Individual may be enrolled with any of the Companies without the Companies’ approval.
1.5. Any sums of money, whether tendered by check, cash or otherwise, delivered to Agent by any person for a Company, must be payable to the appropriate Company and shall be delivered immediately to such Company.
1.6. Agent agrees to maintain Agent’s State of Michigan Health Insurance License (Agent’s “License”) during the term of this Agreement. From time to time, upon the request of the Companies, Agent will provide the Companies with a copy of Agent’s License.
1.7. Agent agrees to notify the Companies immediately if the Agent’s license is suspended or modified or if its insurance is cancelled or modified. Agent agrees to promptly notify the Companies of any disciplinary proceedings related to Agent’s License, including notice of any investigatory proceedings instituted by the State of Michigan’s licensing authority. Agent understands and agrees that the Companies may, at any time, confirm the status of Agent’s License with the State of Michigan.
1.8. Agent agrees to maintain complete and separate records for the Companies for a period of at least seven (7) years of all transactions pertaining to applications submitted to and accepted by the Companies, and any other documents as
may be required by DIFS, the Center for Medicare and Medicaid Services (CMS), or other governmental agency. All records with respect to Medicare business shall be kept for a period of at least ten (10) years. Any and all records described above or as may otherwise relate to Agent’s activities under this Agreement shall be accessible and available to representatives of the Companies who may audit them from time to time while this Agreement is in effect or within ten years after its termination.
1.9. The Companies shall have the right, during normal business hours and with reasonable notice, to inspect, audit, and make copies of books and records of the Agent for the purpose of verifying Agent’s compliance with the terms and
obligations of this Agreement.
1.10. All expenses incurred by Agent in performance of his or her duties under this Agreement shall be borne exclusively by Agent and not by the Companies. Agent hereby indemnifies and holds the Companies harmless from and against any and all claims, suits, or actions by third parties for the payment of expenses or commissions.
1.11. Agent shall indemnify and hold the Companies harmless from and against any and all claims, lawsuits, demands, liabilities, taxes (including taxes on compensation), charges, judgments, settlements, costs, penalties and expenses of
whatever kind or nature the Companies may sustain or incur at any time and arising in any manner out of an act, error or omission by Agent with respect to this Agreement.
1.12. The Companies shall indemnify and hold the Agent harmless from and against any and all claims, lawsuits, demands, liabilities, taxes (including taxes on compensation), charges, judgments, settlements, costs, penalties and expenses of whatever kind or nature the Agent may sustain or incur at any time and arising in any manner out of an act, error or omission by the Companies with respect to this Agreement.
1.13. Agent will comply with Companies Agent of Record Policy located at the Agent Center, for all Companies Plans, as applicable.
1.14. Agent warrants that he/she has not been convicted of, or pled guilty or no contest, to any criminal act involving dishonesty, fraud, theft, misappropriation of money, or breach of trust or fiduciary duty. Agent agrees to immediately inform the Companies of any of the actions described in the preceding sentence.
1.15. Agent understands Priority Health is required to distribute a Summary of Benefits Coverage (SBC) to its fully-funded groups under the Patient Protection and Affordable Care Act (PPACA). Agent understands and agrees that by accepting a particular group’s SBC from Priority Health on behalf of its group customer, Agent is accepting the responsibility to distribute the SBC to the group within the time frames set forth by SBC regulations.
2. Commissions
2.1. In consideration of Agent’s services in marketing the Fully Funded Plans, the Medicare Plans and the Insurance Plans, Priority Health or PHIC, as the case may be, will pay Agent a commission on a monthly basis or as otherwise set forth on the Agent Center (the “Commissions”). The Commissions shall generally be payable no later than thirty (30) days after the end of the calendar month for which premiums are earned. The total Commissions payable to Agent shall be based on actual premium payments received by the Companies. The Companies will not pay Commissions on any premiums recovered through a collections process or as a result of legal action, including, but not limited to, the filing of a Proof of Claim in a bankruptcy proceeding.
2.2. Commissions shall be payable only so long as this Agreement is in effect and Agent is designated by the Group or Individual as the current Agent of Record to receive the Commissions. Groups may elect to pay Agent directly, in which case, such Groups will provide the Companies a written “letter of instruction”, and the Companies will not pay the Commissions to Agent on behalf of such Groups. The Companies will have no liability for Commissions not paid to Agent if the Companies hold such a letter of instruction from a Group.
2.3. Commissions for marketing the Self-Funded Plans shall be payable on a case-by-case basis, as agreed by Agent, Group and the appropriate Company, in writing.
2.4. Commissions shall be payable to the party designated in the “Commission payment assignment” section of this Agreement. Agent shall complete and return the attached W-9 form to the Companies with this Agreement. The Companies will issue a Form 1099 at the end of the tax year to the party designated on the Schedule, in accordance with IRS regulations. If the Companies do not receive a W-9 form from Agent, Commissions may be subject to backup
withholding.
2.5. The Companies will publish the amount of standard Commissions payable for the various Plans on the Agent Center. The amounts of Commissions for the Agent’s specific groups are reported on the agent commission statement, which is available on the Agent’s Agent Center account.
2.6. The amount of the Commissions may be amended by the Companies at their sole discretion at any time upon thirty (30) days prior written notice to Agent.
2.7. If one or more of the Companies pay Agent more than the amount due to Agent as Commission, the appropriate Companies will offset such overpayment against Agent’s next Commission payment. If such Companies are unable to offset such overpayment, the appropriate Companies will send a notice of overpayment along with an invoice to Agent who will pay the balance owed to the appropriate Companies within thirty (30) days of receiving a notice of overpayment.
Agent shall promptly notify the Companies if Agent becomes aware of an overpayment. Overpayments may arise several ways, including, but not limited to, retroactive disenrollment of members, termination of a Group or Individual for failure to pay premium, or the Companies’ payment of an incorrect amount of Commission.
2.8. Agent shall notify the Companies if Agent believes he or she is owed additional Commissions by one or more of the Companies. Agent’s notice to the Companies must be in writing and received within one-hundred twenty (120) days from the date of the commission statement in question. Agent will forfeit any additional Commissions owed by one or more of the Companies if Agent fails to timely notify Companies of a potential underpayment. Commission adjustments will be made retroactively up to 12 months.
3. Term and Termination
3.1. Term. The initial term of this Agreement shall be for one year from the effective date. This Agreement shall automatically renew at the end of the initial term and continue in effect for successive one year terms thereafter unless
and until terminated in accordance with Section 3.2.
3.2. Termination.
3.2.1. Termination by Mutual Agreement. This Agreement may be terminated at any time upon written agreement of the parties.
3.2.2. Termination For Cause. This Agreement may be terminated for cause on the date specified in a written notice given by either party upon not fewer than thirty (30) days’ prior written notice. For purposes of this Agreement, a termination shall be “for cause” if it is based upon any material breach by a party of any of the terms of this Agreement.
3.2.3. Termination Without Cause. This Agreement may be terminated by either party without cause upon sixty (60) days prior written notice.
3.2.4. Termination For Failure to Meet Production Standards for a Schedule. The Companies may terminate the Schedule(s) for the Agent’s failure to meet production standards as set forth in the Agent Center upon sixty (60) days prior written notice.
(a) Notwithstanding the foregoing, and at their discretion, the Companies may immediately terminate Schedule B for the Agent’s failure to sell twenty (20) Individual Plans within twelve (12) months of the effective date of the Agreement. 3.2.5. Immediate Termination. The Companies may terminate this Agreement immediately at any time by written notice to Agent in the event that:
(a) Agent’s License is revoked, suspended or restricted, or Agent otherwise becomes unqualified to market the Plans in the State of Michigan; or
(b) Agent has committed or attempted to commit fraud against the Companies or Individual(s) or has been dishonest about some important or material matter; or
(c) Agent has committed theft, misappropriated money, or breached any fiduciary duty.
(d) Agent has been previously terminated in accordance with Section 3.2.4 (Termination For Failure to Meet Production Standards) above, Companies reserves the right to immediately terminate this Agreement unless Agent has received prior written approval from the Companies for an exception to this provision.
3.2.6. Agent Certification. If Agent does not comply with the Companies’ marketplace requirements or agent certification program, if any, the Companies may terminate this Agreement at their discretion, in accordance with Section 3.2.2.
3.2.7. Immediate payment of sums. Upon termination for any reason, Agent shall immediately pay in cash any sums due to the Companies at the time of termination.
3.2.8. Return of Companies’ Property. Agent shall return within five (5) business days of the termination of this Agreement all property belonging to Companies as described in Section 10.1 (Proprietary Information) below.
4. Disclaimer of Interest.
4.1. Agent covenants and agrees that any contracts between the Companies and any Groups or Individuals are the exclusive property of the Companies and Agent has no property or other interest whatsoever in such contracts.
5. Liability Insurance.
5.1. Agent shall obtain, and maintain in effect during the term of this Agreement, errors and omissions liability insurance (with a carrier acceptable to the Companies) covering Agent while performing services under this Agreement. Upon the Companies’ request, Agent will furnish a certificate of insurance evidencing such coverage. The errors and omissions insurance will have minimum amounts of $500,000 per occurrence/ $750,000 in the aggregate.
6. Entire Agreement.
6.1. This Agreement, the agent application and all schedules, attachments and amendments to this Agreement, and policies, procedures posted on the Agent Center shall constitute the entire agreement between the parties relating to the subject matter of this Agreement. Each party acknowledges that no representation, inducement, promise or agreement has been made, orally or otherwise, by another party, unless such representation, inducement, promise or agreement is embodied in this Agreement, expressly or by incorporation.
7. Amendment.
7.1. Either party may amend this Agreement upon written notice to the other if amendment is necessary in order to comply with applicable law. The Companies may amend this Agreement upon thirty (30) days’ prior written notice to Agent, unless Agent objects in writing within (fifteen) 15 days of the date the Companies notified the Agent of the proposed amendment. If the Companies receive such a timely objection, the Companies and Agent will make a good faith effort to resolve the objection. If the objection cannot be resolved to the mutual satisfaction of the parties, the amendment will go into effect and Agent may terminate the Agreement upon 30 day’s written notice to the Companies.
8. Waiver.
8.1. Failure by the Companies to insist upon compliance with any provision of this Agreement at any time or under any set of circumstances shall not operate to waive or modify the provision or in any manner render it unenforceable as to any other time. No waiver of any terms or conditions of this Agreement shall be valid or of any force or effect unless contained in a written memorandum specifically expressing such waiver and signed by a person duly authorized by the Companies to consent to such waiver.
9. Governing Law and Compliance with Laws.
9.1. This Agreement will be governed by, and construed in accordance with the laws of the State of Michigan.
9.2. Companies and Agent shall comply with all applicable state and federal laws and regulations applicable to their businesses, their licenses and transactions into which they enter, including but not limited to all applicable Medicare Advantage, Medicare Part D and/or Medicare Supplement laws, CMS policies and marketing guidelines, as well as the Federal Communications Commission’s final rule amending the Telephone Consumer Protection Act.
10. Proprietary Information.
10.1. Agent acknowledges that the Companies have developed certain symbols, trademarks, service marks, data, processes, plans, procedures and information which are proprietary information and trade secrets of the Companies (the “Proprietary Information”). At all times, both during Agent’s performance of services pursuant to this Agreement and after the termination of this Agreement, Agent agrees not to use or permit the use of the Proprietary Information, except as expressly contemplated by this Agreement, without the prior written consent of the Companies. Agent shall cease or cause the cessation of any and all usage of the Proprietary Information and shall return any Proprietary Information, including all sales materials for the Plans, to the Companies immediately upon the termination of this Agreement.
11. Confidential Information.
11.1. The Companies and Agent acknowledge and agree that health information of the Companies’ members, enrollees and insured (“Protected Health Information”) is entitled to protection from disclosure beyond the requirements for Proprietary Information. The parties, therefore, agree to protect the confidentiality of Protected Health Information as required by the Health Information and Patient Portability Act of 1996, as amended (“HIPAA”), and including the Health Information Technology for Economic and Clinical Health Act (“HITECH”). Agent may release Protected Health Information only as permitted by HIPAA and HITECH as stated in the HIPAA Business Associate Addendum. Furthermore, Agent agrees that to the extent Agent may receive from Companies, or create or receive on behalf of Companies, certain information that is defined as “non-public personal information” under the Gramm-Leach-Bliley Act and its implementing regulations, Agent will only use or disclose such non-public personal information as would be permitted by the Gramm-Leach-Bliley Act or other applicable federal or state privacy laws.
11.2. Agent agrees to restrict the use or disclosure of confidential information of Companies or affiliates (“Confidential Information”) obtained in connection with the performance of this Agreement to purposes directly connected with the performance of the responsibilities specified in this Agreement, and shall prevent the unauthorized disclosure, use, or duplication of such Confidential Information except as is necessary for Agent to perform its obligations to Companies and in furtherance of the Companies’ interests. Any other disclosure made hereunder by Agent shall be deemed unauthorized unless Agent obtains the prior written consent of the Companies. No Confidential Information shall be released to any Member, or release Confidential Information to any third party, including, but not limited to, any agent and/or subcontractor, without such party having first executed a confidentiality and indemnification agreement in a form acceptable to the Companies. In releasing any Confidential Information, the Companies do not waive any protection they may have regarding trade secrets and other proprietary information pursuant to either the State or Federal Freedom of Information Acts.
11.3. Confidential Information under this Agreement includes, but is not limited to:
a) All communication of information between the parties in any form whatsoever, including oral, written, and electronic form, pertaining to the Agreement.
b) All data, records, trade secrets or know-how;
c) Materials, Plans, products, specifications, manuals, price-books, rating tools, business plans, underwriting policies;
d) Database information services, inventions, developments, processes, technology, designs, engineering, hardware configuration information;
e) Marketing plans, financial information, customer lists, rate renewals, documentation, legal contracts, statements of work;
f) Hospital, physician, and other health care provider financial data, including provider tax identification numbers and claims utilization and payment data with respect to the services these providers have rendered to Companies’ members;
g) Other business information disclosed or submitted, orally, in writing, or by any other media; and
h) Materials produced by Agent containing any information specified herein.
11.4 At the conclusion of this Agreement or upon electronic or written request, all files containing Confidential Information shall be promptly returned to Companies, or, at the Companies’ sole discretion, erased or rendered permanently inaccessible. Upon Companies’ request, Agent shall deliver a written statement that a diligent search and inquiry has been made for any Confidential Information, and that all such Confidential Information was returned, erased, or rendered permanently inaccessible. Agent may not keep or use any Confidential Information after the engagement is completed, except to the extent required by law.
11.5. Notwithstanding anything to the contrary contained herein, the provisions of Section 11.2 and 11.3 shall not apply to any information which: (i) at the time disclosed to, or obtained is in the public domain; (ii) becomes part of the public domain through no fault of Agent; (iii) was communicated by a third party who is not, to Agent’s knowledge, subject to any confidentiality obligations with respect thereto; (iv) is independently developed by the Agent; or (v) is required to be disclosed by operation of law.
12. Captions.
12.1. Captions used in this Agreement are for the convenience of the parties only and are not intended to be used in the interpretation of this Agreement.
13. Invalid Provisions.
13.1. Any section, paragraph, sentence, phrase or other provision of this Agreement that is in conflict with any applicable statute or other law or regulation will be considered to be modified or altered to conform to that statute, law or regulation, but if such modification or alteration is not possible, it will be omitted. The invalidity of any portion of this Agreement will not affect the remaining provisions of this Agreement.
14. No Third-Party Obligations.
14.1. The obligations of each party to this Agreement shall ensure solely to the benefit of the other party, and no person or entity shall be a third-party beneficiary of this Agreement.
15. Notices.
15.1. Any notice or other communication to be given pursuant to Section 3.2 of this Agreement shall be in writing and shall be deemed to have been received by the party to whom it is addressed (a) three (3) business days after it is deposited in the United States mail (first-class, airmail, or express mail) in each case delivered to the address set forth below for the recipient. Delivery shall be made to such other address as the receiving party has given notice pursuant to this Section.
15.2. If to the Companies:
Vice President, Sales & Client Services
Priority Health
1231 E. Beltline, NE
Grand Rapids, MI 49425-4501
If to Agent:
Any notices required under this Agreement shall be sent to the email or physical address given by Agent on the signature page below unless a written change of address notification is received from Agent.
15.3. Any information required to be provided “in writing” under this Agreement, other than notices under Section 3.2, may be provided to the other party by United States mail, email or personally at the addresses noted in Section 15.2 above, without evidence of receipt. The Companies shall be considered in compliance with this section by posting information on the Agent Center, so long as the effective date for such new information is no fewer than (thirty) 30 days after the date of posting.
16. Assignment.
16.1. The Companies may assign this Agreement to an affiliated or successor entity. This Agreement is personal to Agent and, therefore, Agent may not assign this Agreement.
17. Relationship of Parties.
17.1. None of the provisions of this Agreement are intended to create, nor shall be deemed or construed to create, any relationship between the Companies and Agent other than that of independent entities contracting with each other solely for the purpose of effecting the provisions of this Agreement. Except as this Agreement provides otherwise, none of the parties, nor any of their respective employees or agents, shall be construed to be the agent, partner, co venturer, employee, or representative of the other.
18. Assignment of Commissions.
18.1 The Companies will calculate the Commission based on actual premium payments received as set forth in Section 2 of the Agreement.
18.2 Commissions will not be paid for any time in which the Agent’s Health and Life license is suspended or terminated.
18.3 Commissions will not be adjusted based on contract gains/losses, other than at renewal.
18.4 Commission payments will be made via Electronic Funds Transfer (“EFT”). EFTs happens on the 7th day of each month, unless it falls on a weekend or holiday, then it is the following business day. If the direct deposit information is filled out incorrectly Companies will notify the Agent with the contact information provided and commissions will be suspended until updated information is received.
18.5 Notice of Change (“NOC”). If Agent receives a NOC from their bank they have thirty (30) days from the time they receive the notice to update their information with the Company, otherwise commissions will be suspended until updated information is received.
18.6 Commissions will not be paid for any month in which the companies do not receive premium.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above.
PRIORITY HEALTH
PRIORITY HEALTH MANAGED BENEFITS, INC.
PRIORITY HEALTH INSURANCE COMPANY
Praveen Thadani
President