4.8 SR 07-18-2022
Request for Action
To Item Number
Mayor and City Council 4.8
Agenda Section Meeting Date Prepared by
Consent July 18, 2022 Lauren Wipper, Human Resources Manager
Item Description Reviewed by
Better Health Collective Membership Cal Portner, City Administrator
Agreement
Reviewed by
Action Requested
Adopt, by motion, a resolution to join the Better Health Collective and their Membership Agreement.
Background/Discussion
Our 2022 insurance renewal included a change to the Sourcewell Service Cooperative for our medical insurance. On
November 15, 2022, the City Council approved a Joint Powers Agreement for our membership into that pool.
Sourcewell has been working on a review of the current Joint Powers Agreement to achieve formal recognition of
the pool as a political subdivision joint health insurance pool through the Minnesota Department of Commerce.
With that, they have decided to change the name from Sourcewell to the Better Health Collective.
Financial Impact
None
Mission/Policy/Goal
Elk River Mission
Attachments
Resolution
Membership Agreement and Bylaws of the Better Health Collective
The Elk River Vision
A welcoming community with revolutionary and spirited resourcefulness, exceptional
service, and community engagement that encourages and inspires prosperity.
Updated: August 2020
City of Elk River
City Council
Resolution 22-____
A Resolution of the City Council of the City of Elk River to Enter into an
Agreement with Better Health Collective
WHEREAS, The City of Elk River is currently a Participant Member of the Sourcewell
Risk Management Pool, pursuant to which City of Elk River obtains self-funded health
insurance coverage for City of Elk River’s eligible employees and their covered dependents;
and
WHEREAS, the Sourcewell Risk Management Pool has determined it is appropriate and
necessary to obtain authorization from the Minnesota Department of Commerce to operate
as a Political Subdivision Joint Self Insurance Pool in accordance with Minn. Stat. § 471.617
and Minn. R. Ch. 2785; and
WHEREAS, effective January 1, 2023, the self-funded health insurance coverage
previously provided by the Sourcewell Risk Management Pool will be provided by the duly
authorized Political Subdivision Joint Self Insurance Pool named The Better Health
Collective; and
WHEREAS, Minnesota law requires Political Subdivision Self Insurance Pools to adopt
bylaws containing terms and conditions required by Minnesota law, and a governance
structure that complies with Minnesota law, which Participating Members must agree to
adhere to; and
WHEREAS, the City of Elk River wishes to join the Better Health Collective as a
Participating Member effective January 1, 2023.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Elk
River, Minnesota, as follows: The City of Elk River agrees to become a Participating
Member of The Better Health Collective effective January 1, 2023. As a Participating
Member, the City of Elk River approves the Membership Agreement and Bylaws of The
Better Health Collective in the form attached hereto as Exhibit A.
Passed and adopted this 18 day of July 2022.
John J. Dietz, Mayor
ATTEST:
Tina Allard, City Clerk
MEMBERSHIP AGREEMENT AND BYLAWS
OF THE
BETTER HEALTH COLLECTIVE
Effective: July 1, 2022
INTRODUCTION
This combined Membership Agreement and Bylaws is made by and between The Better
Health Collective and the entities listed in to
establish and govern the operations of the Better Health Collective Employee Health Benefits Pool (the
.
WHEREAS, Minnesota Statutes, § 471.59, provides that two (2) or more governmental units may, by
agreement, jointly or cooperatively exercise any power common to them; and
WHEREAS, the Participating Members are governmental units for purposes of Minnesota Statutes, §
471.59; and
WHEREAS, Minnesota Statutes, § 471.617, provides that certain governmental entities which together
employ more than one hundred (100) employees may jointly self-insure employee health benefits; and
WHEREAS, together the Participating Members employ more than one hundred (100) employees; and
WHEREAS, the Participating Members have jointly established in full force and effect certain self-
insurance arrangements to provide certain employee health benefits, and those arrangements constitute
a self-insurance pool under Minnesota law, including Minnesota Statutes, § 471.617, and Minnesota
Rules, Chapter 2785; and
WHEREAS, the Participating Members may, in the future, wish to jointly provide other employee benefits,
permitted under applicable law, to their employees; and
WHEREAS, the Participating Members authorize the Board of Trustees to act as a joint board for the
purpose of exercising certain powers as set forth in this combined Membership Agreement and Bylaws.
NOW, THEREFORE, each Participating Member in exchange for the mutual covenants, promises, and
obligations contained herein, promises and agrees as follows:
ARTICLE I. NAME, PURPOSE, AND AUTHORITY
1.1 Name. The name of the Pool created herein is Better Health Collective.
1.2 Purpose. The purpose of the Pool is to provide health benefits and related services to eligible
Employees, Former Employees, and Dependents of Participating Members.
1.3 Authority.
1.3.1 Sourcewell. Sourcewell is a statutory service cooperative authorized pursuant to
Minnesota Statutes, § 123A.21, subdivision 7(a)(19) and § 471.617, subdivisions 1-2, to
create and operate a joint self-insurance pool for the purposes of providing employee
health benefits to statutory and home rule charter cities, counties, school districts, and
instrumentalities thereof that wish to jointly self-insure for such benefits. Sourcewell is
the Sponsoring Association of the Pool, and it also qualifies as a Participating Member.
1.3.2 Participating Members. Participating Members are Sourcewell, statutory or home rule
charter cities, counties, school districts, or instrumentalities thereof that wish to jointly
self-insure for employee health benefits pursuant to Minnesota Statutes, § 471.617,
subdivision 2.
1.3.3 Joint Powers Act. The governing bodies of Sourcewell (as the Sponsoring Association) and
each Participating Member have entered this Agreement pursuant to the Minnesota Joint
Powers Act, set forth at Minnesota Statutes, § 471.59, subdivision 1, to govern the
formation, operation, and dissolution of the Pool.
1.4 Prior Agreements. This Membership Agreement and Bylaws shall supersede and terminate any
prior agreement(s) or bylaws regarding Better Health Collective and its predecessor, the
Sourcewell Risk Management Pool.
ARTICLE II. DEFINITIONS
2.1 Board of Trustees, , governing body of the
Pool.
2.2 Bylawsthe elements of this combined Membership Agreement and Bylaws, and
any amendments thereto, which prescribe the purpose, governance, and administration of the
Poolthe Bylaws.
2.3 CommissionerMinnesota Commissioner of Commerce.
2.4 Covered Personfor Coverage under the Plan.
2.5 Coveragemeans the right of a Covered Person to benefits provided by the Pool, by
virtue of the Coverage Document(s).
2.6 Coverage Document(s). the document(s) specifying the
characteristics and duration of Coverage provided through the Pool. Characteristics of Coverage
include the kind of loss or benefit the Pool will reimburse, subject to specific exclusions,
limitations, or deductibles.
2.7 Days
2.8 Dependentor child under age 26 of an Employee or Former
Employee of a Participating Member.
2.9 Employee current employee of a Participating Member who is eligible for
participation in the Plan.
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2.10 Employee Health Benefits PoolsPools a self-insurance pool that
covers employee health benefits, disability benefits, or both.
2.11 Financial Administratoran entity engaged by the Board of
Trustees to
2.12 Former Employeean individual previously employed by a
Participating Member who is eligible for continuing participation in the Plan.
2.13 Membership Agreement
Agreement and Bylaws, and any amendments hereto, which prescribe the purpose, government,
and administration of the Pool. aws
2.14 Participating Memberany Minnesota Political
Subdivision that satisfies the membership requirements and has been approved by the
Board of Trustees for participation in the Pool.
Political Subdivisions. For the avoidance of doubt, the Pool shall not operate as a public/private
pool, and shall not offer membership to any private entity.
2.15 Planany Plan maintained by the Board of Trustees and authorized by Minnesota
law to provide employee health benefits to eligible Employees, Former Employees, and
Dependents of Participating Members.
2.16 Policy Year. -month period of employee health benefits coverage under
a Plan offered by the Pool to a Participating Member.
2.17 Political Subdivisiona statutory or home rule charter city, county,
school district, or instrumentality thereof, and includes any service cooperative that establishes
or operates a self-insured employee health benefits pool.
2.18 Poolrefers to Better Health Collective and means a self-insurance fund or agreement for
the reciprocal assumption of risk established by or amongst two or more Political Subdivisions for
coverage of their respective risks.
2.19 Premium by Participating Members for
Coverageassessments or penalties.
2.20 Reservepool liabilities for all incurred losses, both
reported and unreported, and for unearned Premiums, which are maintained pursuant standards
established by the Board of Trusteesin compliance with applicable Minnesota statutes and rules.
2.21 Runoff Pool-insure, but that
continues to exist for the purpose of paying claims, preparing reports, and administering
transactions associated with the period in which the Pool provided Coverage.
2.22 Self-insure-
benefits rather than transferring liability or responsibility to some other entity.
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2.23 Service Companyan entity engaged by the Board of Trustees to
provide services related to the day-to-day operation of the Pool that are not already reserved for
the Board, individual Trustees, Participating Members, the Financial Administrator, or another
service provider.
2.24 Sponsoring Associationrefers to Sourcewell and means a statewide
nonprofit organization of Political Subdivisions that sponsors or organizes a pool, and which has
as its primary purpose providing services to Minnesota Political Subdivisions that are not related
to insurance or self-insurance.
2.25 Surplus the Pool assets exceed its liabilities and includes
paid-in capital and retained earnings.
2.26 Trusteeselected pursuant to Article III to serve on the Board of
Trustees and act on behalf of Participating Members.
ARTICLE III. BOARD OF TRUSTEES
3.1 Powers, Duties, and Responsibilities. The Board of Trustees shall be responsible for the operations
and financial integrity of the Pool.
3.1.1 Authority to Delegate. The Board is responsible for operation of the Pool. The Board may
delegate some or all of its responsibilities to the Chairperson or other Trustees between
Board meetings. All responsibilities of the Pool not expressly delegated by the Board to
the Sponsoring Association, to a Participating Member, to a Service Company, to a
Financial Administrator, or other contractors, as authorized by Minnesota Rules, Part
2785.0800, are the responsibility of the Board.
3.1.2 Responsibilities. The Board of Trustees shall, at a minimum, have the following
responsibilities:
(a) ,
including but not limited to the review and approval of annual budgets and
financial statements;
(b) Selection, supervision, and evaluation of the Service Company, Financial
Administrator, auditor, insurer, and other service providers;
(c) , authorizing changes in
practices related to premiums, reserve, or investmentpractices; and declaring
assessments or dividends, as appropriate;
(d) Approving all reports to the Commissioner regarding Pool operations and status;
(e) Monitoring for delinquent premiums, loss experience, and the financial condition
of members and authorizing disciplinary action or expulsion, as appropriate;
(f) Authorizing acceptance or rejection of applications for membership in the Pool;
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(g) Developing and adopting Board policies as needed to ensure the day-to-day
operations of the Pool are conducted in a compliant and transparent manner;
(h) Making or recommending changes to this Membership Agreement and Bylaws
(i) ; and
(j) Such other activities necessary to carry out the purposes of this Agreement.
3.2 Board Structure. Pool operations shall be managed by a Board of Trustees consisting of seven (7)
voting members, who shall include three (3) members representing Sourcewell as the Sponsoring
Association. The remaining four (4) members of the Board of Trustees shall consist of one (1)
elected official representing Participating Members that are local school districts; one (1) elected
official representing Participating Members that are cities, counties, or other governmental units
(CCOGA); at least one (1) staff person representing Participating Members that are local school
districts or CCOGA; and one (1) at-large representative of Participating Members, who may be
either an elected official or a staff person.
3.2.1 Selection of Trustees.
(a) Sourcewell shall appoint three (3) Trustees from its Board of Directors or staff.
Sourcewell shall present its appointments to the Board of Trustees at least 30
days within a reasonable time after
a Trustee appointed by Sourcewell resigns, is removed or disqualified as outlined
below, or otherwise needs to be replaced.
(b) The remaining four (4) Trustees shall be appointed by the Labor Management
Committee. The Labor Management Committee shall present its appointments
to the Board of Trustees at least 30 days before the expiration of its
term or within a reasonable time after a Trustee appointed by the Labor
Management Committee resigns, is removed or disqualified as outlined below, or
otherwise needs to be replaced.
3.2.2 Term. Each Trustee may serve for a term of four (4) years and may be re-appointed for
one (1) additional Term.
3.2.3 Resignation. Any member of the Board of Trustees may resign at any time upon written
notice to the Board of Trustees or its Chairperson. Such resignation shall take effect on
the later of the date specified in the notice or the date notice is received by the Board or
the Chairperson.
3.2.4 Disqualification. A Trustee shall be disqualified from service if they no longer serve as an
elected official for a Participating Member or as otherwise required by applicable
Minnesota law or rule. A Trustee shall also be disqualified based on the unanimous vote
of the Board of Trustees in the event a Trustee fails to fulfil his or her obligations as a
suitability to serve as a Trustee.
Page 5 of 24
3.2.5 Appointment of Successor Trustees
resignation, a successor Trustee shall be appointed in accordance with section 3.2.1 to
Successor Trustee may be re-appointed for one (1) additional Term.
3.3 Meetings. The Board of Trustees shall meet no fewer than four (4) times each calendar year. The
time, date, and location of regular meetings shall be determined by the Board.
3.3.1 Organizational Meeting. An Organizational Meeting of the Board of Trustees shall be held
in March of each year, at which time the Board shall elect a Chairperson and appoint the
members of the permanent committees as outlined below.
3.3.2 Annual Meeting. An Annual Meeting of the Board of Trustees and Participating Members
shall be held for the purpose of reviewing the affairs of the Pool and its financials.
3.3.3 Special Meetings. Special meetings of the Board may be called by the Chairperson or any
five (5) Trustees.
3.3.4 Quorum. A quorum at any meeting of the Board of Trustees shall consist of a majority of
the elected Board of Trustees.
3.3.5 Voting. Unless otherwise provided herein, all decisions of the Trustees shall be made by
majority vote of the Trustees present at the meeting at which such vote is taken. A
quorum is required for any actions to be taken by the Trustees.
3.3.6 Minutes. Minutes of all regular, special, and emergency meetings of the Board of
Trustees shall be sent to each Trustee within a reasonable time after the meeting.
3.3.7 Open Meetings Law. All meetings of the Board of Trustees shall be conducted in
compliance with the Minnesota Open Meetings Law at Minnesota Statutes, Chapter
13D.
3.4 Committees. At the Organizational Meeting of the Board of Trustees, the Chair of the Board shall
name the members of the permanent committees, as follows:
3.4.1 Labor Management Committee. The Labor Management Committee, as required
pursuant to Minnesota Statutes, § 123A.25, shall consist of at least one (1) administrator
and one (1) union member representing Participating Members that are local school
districts; one (1) administrator and one (1) union member representing Participating
Members that are CCOGA; one (1) member representing Former Employees of
Participating Members; and one (1) school district and one (1) CCOGA member at large,
who can be either an administrator or a union member. Two (2) members of the Board
of Trustees shall serve as ex Officio, non-voting members of the Labor Management
Committee, with one (1) Trustee representing the Sponsoring Association and one (1)
representing Participating Members that are not the Sponsoring Association. The Labor
Management Committee shall be tasked to perform the following functions and any other
duties delegated to it by this Agreement or resolution of the Board of Trustees:
(a) Make recommendations regarding management matters related to Coverage;
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(b) Assist in the preparation of the Annual Budget;
(c) Make recommendations regarding requests for expenses in excess of budget;
(d) Review quarterly and annual financial reports; and
(e) Review all applications for membership in the Pool and make a
recommendation to the Board of Trustees.
3.4.2 Other Committees. The Board may designate other advisory or ad hoc committees and
delegate authority to them in accordance with this Agreement and applicable Minnesota
statutes and rules. The Board shall consider, but is not required to adopt, committee
recommendations and proposals.
ARTICLE IV.MEMBERSHIP
4.1 Powers, Duties, and Responsibilities. Each Participating Member shall fulfill the duties and
responsibilities as outlined herein. At the discretion of the Board of Trustees, failure by a
Participating Member to fulfill its duties and obligations may constitute the basis for expulsion
pursuant to Section 4.7.2 herein. These duties and responsibilities include, but are not limited to:
4.1.1 Compliance. The duty to fully comply with this Agreement, as written or amended; any
delegation of authority from the Board of Trustees; Board policies and procedures; and
applicable Minnesota statutes and rules.
4.1.2 Financial Obligations. The duty to pay to the Pool all Premiums, assessments, and other
required contributions within the expected timeline and in the appropriate amounts.
4.1.3 Participation. The duty to actively participate in Annual Meetings and other Pool-related
matters as requested or required by this Agreement or the Board of Trustees, and to
promptly act on matters requiring
4.1.4 Cooperation. The duty to fully cooperate with the Board of Trustees, Service
Company andFinancial Administrator, and any other service provider engaged by the
Board.
4.1.5 Communication. The duty to notify Covered Persons within thirty (30) days if the
Participating Member withdraws or is expelled from the Pool and any other circumstance
in which the Member is obligated to provide notice to Covered Person.
4.2 Contractual Obligations.
4.2.1 Continuing Duties and Responsibilities. The duties and responsibilities of Participating
Members, including the duty to comply with this Agreement, shall continue throughout
required herein.
4.2.2 Enforcement. This Agreement may be enforced in law or equity by the Board of Trustees
or any Participating Member.
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4.2.3 Consideration. Consideration for the duties and responsibilities imposed upon
Participating Members is based upon the mutual promises and agreements set forth
herein and the advantages each Member gains through participation in the Pool.
4.2.4 Liability. This Agreement does not constitute consent to liability for any claim against
another Participating Member. Nor does it create a partnership, surety, indemnification,
or liability for the general debts or claims against another Member.
4.3 Health Coverage Comparison Shopping and Collective Bargaining.
4.3.1 Member Obligations. The Board of Trustees is not capable or authorized to act on behalf
of Participating Members with respect to their collective bargaining obligations.
Specifically, but without limitation:
(a) Each Participating Member is solely responsible for meeting the collective
bargaining limitations provided in Minnesota Statutes, § 471.6161, subdivision 5,
which require that the aggregate value of benefits provided by a group insurance
contract for employees covered by a collective agreement shall not be reduced,
unless the public employer and exclusive representative of employees of an
appropriate bargaining unit agree to a reduction in benefits;
(b) Each Participating Member shall be solely responsible for meeting the
requirements specific to school districts pursuant to Minnesota Statutes, §
471.6161, subdivision 8, if applicable; and
(c) Each Participating Member shall be solely responsible for complying with the
notice and other requirements regarding the adoption or dissolution of a self-
insured employee benefit plan as set forth in Minnesota Statutes, § 471.617,
subdivision 4.
4.3.2 Pool Obligations. Pursuant to Minnesota Statutes, §§ 471.617, subdivision 5 and 123A.21,
subdivisions 7(c) and 12:
(a) The Pool shall rebid contracts for third party administration at least every four (4)
years and otherwise comply with applicable Minnesota statutes and rules with
respect to establishing Premiums related to employee health benefits; and
(b) The Board of shall not impose a fine or other penalty against a school district or
other Political Subdivision that solicits bids and other information from
competing sources of employee health benefits, provided such action does not
occur within five (5) months prior to the end of
Year. However, the Board may prohibit any school district or other Political
Subdivision that solicits such a bid from participating in the Pool for up to one (1)
year if the entity leaves the Pool to obtain other Coverage.
(c) Notwithstanding Minnesota Statutes, § 13.203, the Pool shall provide each
Participating Member with the monthly claims data. All
such data will be de-identified and shall not include identifying information as
defined pursuant to Minnesota Statutes, § 144.291, subdivision 2(d). No
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Participating Member or its employee or agent shall disclose any information
about individual claims or total claims of an individual without the consent of the
individual, except that the information may be disclosed to officers, employees,
or agents of the Participating Member to the extent necessary to enable them to
perform their duties in administering the health benefit program.
4.4 Eligibility and Application. Any Minnesota Political Subdivisionmay apply to enter the Pool by
submitting a Request for Proposal (RFP) or application form and documentation establishing the
prospective member the underwriting standards and any other
nondiscriminatory membership criteria adopted by the Board of Trustees. All Coverage offered
by the Pool shall be available to all Participating Members and to all eligible Employees, Former
Employees, and Dependents according to the same underwriting standards. However, the Board
shall not be required
standards.
4.5 Approval and Admission of New Members. Upon review and approval of the documentation
outlined in Section 4.4 herein, theBoard of Trustees shall adopt a resolution approving a
1
Member to the list of Participating Members in Appendix A upon receipt of:
4.5.1 Membership Agreement and Bylaws. An executed copy of this Agreement; and
4.5.2 Board Resolution. A resolution from the governing body of the prospective member
outlining the :
(a) Fully comply with this Agreement; Minnesota Rules, Parts 2785.0010 to
2785.1600, including joint and several liability; and other applicable Minnesota
statutes and rules; and
(b) Participate in the Pool for a minimum of one (1) Policy Year. This initial
commitment shall automatically renew for subsequent one-year terms unless the
Participating Member provides notice of voluntary withdrawal pursuant to
Section 4.7.
4.6 Effective Date. The effective date for membership shall be January 1 or July 1, whichever is closest
to the date the Participating Member meets the requirements outlined herein. The Board of
Trustees may permit entry into the Pool at other times and may impose restrictions and
limitations with respect to such entry.
4.7 Leaving the Pool.
4.7.1 Voluntary Withdrawal. A Participating Member may withdraw from the Pool without
penalty by providing notice to the Board of Trustees at least five (5) months before the
end of the Year subject to the following:
1
Appendix A may be modified at any time to pursuant to this Agreement and Bylaws. Such
modifications do not constitute an amendment to this Agreement and do not otherwise modify the
terms and conditions herein.
Page 9 of 24
(a) Withdrawal is prohibited if the Participating Member has not participated in the
Pool continuously for a minimum of one (1) complete Policy Year or if there are
outstanding Premiums or assessments owed by the Member.
(b) The Board shall notify the Commissioner under any circumstances in which the
violation of the minimum
annual Premium requirement as outlined in Section 8.2.2 herein or would
nancial integrity.
(c) Withdrawal is generally irrevocable upon receipt of the notice by the Board of
Trustees. However, the Board may reject
is contrary to applicable law or revoke it at the request of the Member.
(c) The Pool shall pay eligible claims incurred by Covered Persons prior to the
effective date of withdrawal Run Out Cprovided such claims are
presented to the Pool, or its designee, within 180 days after the effective date of
the withdrawal. The withdrawing Member shall be responsible for any claims
incurred after the effective date of the withdrawal and any Run Out Claims
submitted to the Pool after the 180-day period ends.
4.7.2 Expulsion. No less than annually, the Board of Trustees shall review each Participating
status and experience to determine whether they meet any criteria for
expulsion. Expulsion is subject to the requirements for voluntary withdrawal above
except that a Member may be expelled with outstanding Premiums or assessments owing
and regardless of whether the minimum membership commitment has been satisfied, if
applicable. Criteria for expulsion include:
(a) Failure to remit any Premium, assessment, or penalty in the amount required by
the date due;
(b) Failure to comply with this Agreement and Bylaws, a delegation of authority from
the Board, Board policies and procedures, or applicable laws and rules;
(c) Failure to performother assigned obligations with respect to the Pool or any Plan;
(d) Failure to satisfy the standards of financial integrity adopted by the Board; or
(e) Other action or failure to act which the Board of Trustees determines to be
detrimental to the interests of the Pool or any Plan.
4.7.3 Member Interest in Surplus Following Withdrawal or Expulsion. A Member that
withdraws or is
ARTICLE V. ADOPTION AND AMENDMENT OF BYLAWS
5.1 Adoption. This combined Membership Agreement and Bylaws is intended to describe the
purpose, governance, and operations of the Pool, and to satisfy applicable Minnesota statutes
and rules. The Agreement shall be adopted, in writing, by resolution of the governing bodies of
each Members.
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5.2 Amendment. The Board of Trustees shall have the authority to amendor restate this Agreement
and Bylaws at any time, provided such action is taken by resolution at a duly noticed meeting of
the Board with an agenda that specifically includes the amendment or restatement as an item of
business. The Board of Trustees shall solicit the advice and counsel of the Labor Management
Committee in considering any material amendment to this Agreement. The Chairperson shall file
any changes to this Agreement with the Commissioner within thirty (30) days after adoption.
ARTICLE VI. SERVICE COMPANY
6.1 Powers, Duties, and Responsibilities. The Board of Trustees shall engage a Service Company to
perform -to-day operations and the administration of
Coverage, except those services and responsibilities reserved to Sourcewell, other Participating
Members, the Board, individual Trustees, the Financial Administrator, the accountant, or other
service providers. Such services may include but are not limited to: account and record keeping;
billing and collection of Premiums and assessments; claims investigation, settlement, and
reserving; claims payment, including those subject to stop-loss insurance or member deductibles;
general administration;loss control; andunderwriting.
6.2 Selection.
6.2.1 Qualifications. The Board shall select a Service Company licensed by the Commissioner as
a self-insurance plan administrator, an insurance company authorized to transact
insurance in Minnesota, or a service plan corporation.
6.2.2 Procedures.
(a) The Board may issue a request for proposal (RFP) with respect to a need for a
Service Company at any time, but at least every four (4) years.
(b) The Board shall evaluate responses to the RFP in accordance with applicable law,
and criteria adopted by the Board and select a Service Company qualified to
provide the required services. Notwithstanding the above, the Board may
negotiate with any entity that responds to the RFP or disregard the responses
altogether.
(c) In evaluating a Service Company, the Board shall
consider its experience in delivering service required. The Board shall also ensure
there are no potential conflicts of interest between the entity and the Pool.
6.3 Compensation and Agreement. The Board shall negotiate with the Service Company with respect
to compensation and other necessary terms, which shall be documented in a contract approved
by the Board and executed by the Chairperson and the Service Company.
6.4 Annual Review. The Board shall conduct an annual review of the performance
and take necessary action if the entity is not performing as expected or required pursuant to the
Boards contract with the Service Company.
ARTICLE VII. FINANCIAL ADMINISTRATOR
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7.1 Powers, Duties, and Responsibilities. The Board of Trustees shall engage a Financial Administrator
to invest the provide other necessary financial or accounting services. Certain
duties relating to financial administration of the Pool may also be delegated to Sourcewell or
another Participating Member. Investment of the Pool assets shall be subject to Minnesota
Statutes, § 118A.04, with regard to the permitted types of investments, maturities, and
depositories. Pool assets shall not be invested in securities or debts of a Participating Member or
any entity under contract with the Pool.
7.2 Selection. The Board shall engage a Financial Administrator that employs persons trained and
experienced in money management and investments and possess no less than five (5) years'
experience as an organization in these specialties with demonstrated competence. The Board may
not engage a Financial Administrator that employs an owner, officer, employee, or agent of the
Service Company or any subcontractor of the Service Company.
7.3 Compensation. The Board shall negotiate with the Financial Administrator with respect to
compensation and other necessary terms, which shall be documented in a contract approved by
the Board and executed by the Chairperson and the Financial Administrator.
7.4 Annual Review.
performance and take necessary action if the entity is not performing as expected or required
pursuant to the Boards contract with the Financial Administrator.
ARTICLE VIII. COVERAGE, PLAN PARTICIPATION, AND PREMIUMS
8.1 Coverage. As an Employee Health Benefits Pool, the Pool shall provide only employee health
benefits, disability benefits, or both, as those terms are defined herein.
8.1.1 Changes in Coverage. The Board of Trustees may, from time to time, amend or terminate
an existing Plan, or adopt a new Plan.
8.1.2 Notice of Changes in Coverage. Participating Members shall be solely responsible for
notifying their Employees, Former Employees, and Dependents of changes to any Plan(s)
offered by the Pool. In addition, each Participating Member shall be solely responsible for
meeting obligations related to collective bargaining of benefits pursuant to Section 4.3.
8.1.3 Coverage Administration and Related Requirements. The Pool is subject to the state
statutes and rules applicable to insurance companies that provide insurance similar to the
coverage offered by the Pool. Such requirements include, but are not limited to,
Minnesota Statutes, Chapters 60A, 62A, 62E, 65A, 65B, 70A, 72A, and 72C, 79, and 176,
and rules adopted under these chapters concerning:
(a) Filing and requesting approval for coverage documents;
(b) Coverage document content and language;
(c) Mandated benefits, including coverage conversion and continuation;
(d) Coverage administration, including notices to Covered Persons;
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(e) Claims administration; and
(f) Other practices affecting coverage.
8.1.4 Uniform Underwriting. All Coverages offered by the Pool shall be available according to
the same underwriting standards to all Participating Members and, if applicable, to all
, Former Employees, and Dependents.
8.1.5 Continuing Responsibility. Notwithstanding cancellation or termination of Coverage to a
specific Participating Member, ceasing to offer a particular Coverage or ending or
revocation of the Pools authority to self-insure, the Pool retains indefinitely all
responsibilities to Members and other Covered Persons associated with the period while
Coverage was in force. This responsibility ceases only after the Pool dissolves pursuant
Section 12.4 herein.
8.2 Premiums.
8.2.1 Schedule. Participating Members shall pay Premiums owed on a monthly basis with
payments due in the month before the Premium is earned. The Board of Directors shall
promptly take action to collect past due Premiums. Collection costs shall be the sole
responsibility of the delinquent Member.
8.2.2 Minimum Annual Premium. The Pool shall maintain an annual premium volume in
accordance with applicable statutory requirements. The Pool shall monitor its premium
volume to ensure it is meeting statutory requirements, or other premium volume amount
approved by the Commissioner, and shall comply with any and all requirements to notify
the Commissioner regarding its premium volume.
8.2.3 New Pool Deposit Premium. The Pool shall maintain an initial deposit premium for its first
year of operations in an amount that complies with applicable statutory requirements or
pursuant to an arrangement approved by the Commissioner.
8.2.4 Premium Changes. The Board of Directors shall conduct an annual review, based on sound
actuarial principals, of Premiums to determine whether a rate adjustment is required for
any Participating Member(s) or Plan(s). Premium changes shall be approved by the Board
and disclosed to Participating Members at least sixty (60) days prior to the effective date
of the change. Participating Members shall be solely responsible for notifying Covered
Persons and appropriate union representatives of such changes.
8.3 Former Employees. Participating Members shall be responsible for determining who, if any, of
their Former Employees remain eligible for Employee Health Benefits. If the Member withdraws
or is expelled from the Pool, its Former Employees shall no longer be eligible for Coverage.
ARTICLE IX. FINANCIAL INTEGRITY
9.1 Standards of Financial Integrity. The Board of Trustees shall establish written standards of
financial integrity forthe Pool. These standards shall comply with applicable Minnesota law and
rule, including, but not be limited to, the following:
Page 13 of 24
9.1.1 Pool Assets. The Pool assets:
(a) Shall not be commingled with the assets of any Participating Member;
(b) Shall not be loaned to anyone for any purpose or used as security for a loan,
except as permitted for investments;
(c) Shall be employed solely for the purposes stated in this Membership Agreement
and Bylaws, and applicable Minnesota law and rule; and
(d) Shall not be considered the property or right of any Participating Member or
Covered Person, except for benefits under the Coverage Documents, for declared
dividends or distributions, if any, or for its portion of assets remaining after the
.
9.1.2 Sources of Funds.
(a) Except for stop-loss coverage as described below, the Board shall not borrow
money, issue debt instruments, or obtain funds through subrogation.
(b) The Board may receive funds only from:
i. Legal action to collect delinquent debts;
ii. Participating Members or jointly and severally liable past Members, as
applicable, as Premiums, assessments, and penalties;
iii. Its insurers and indemnitors pursuant to applicable agreements;
iv. Dividends, interest, or proceeds from the sale of investments;
v. Refunds of excess payments;
vi. Coordination of benefits with other insurance programs; and
vii. Collection of money owed to the Pool.
9.1.3 Use of Pool Assets. The Board of Trustees shall expend funds for payment of losses,
expenses, andfor other costs customarily borne by insurers under conventional insurance
policies in Minnesota, and for any other purpose permitted or provided by applicable law.
9.1.4 Reserves. The Board of Trustees shall establish Reserves for all incurred loses, both
reported and unreported, and for unearned Premiums. To the extent the amount of loss
is uncertain, the reserve shall be set conservatively. As the degree of uncertainty is
changed by new events or information, the amount of the reserve shall be modified
accordingly. Accounting for Reserves shall be as required by the financial statement forms
and instructions under Minnesota Rules, Part 2785.1600, subpart 2.
9.1.5 Fidelity Bond. All individuals who handle, or who have authority to gain access to, Pool
funds, including Trustees, shall be covered by a fidelity bond or policy of insurance
Page 14 of 24
coverage approved by the Commissioner covering losses from dishonesty, robbery,
forgery or alteration, misplacement, or mysterious or unexplainable disappearance. The
amount of coverage for each occurrence shall be $300,000 or more. The Pool shall
purchase a fidelity bond or policy of insurance coverage approved by the Commissioner
covering the required service providers and individuals or submit to the Commissioner
separate proof of coverage for all required service providers and individuals not covered
or applicable insurance coverage.
9.1.6 Separate Accounts. The Board of Trustees may, but shall not be required to, establish
separate accounts for the payment of claims or certain types of expenses. The accounts
shall be used only by the Service Company, its authorized subcontractors, or the Financial
Administrator, as appropriate The amount in these separate
accounts shall not exceed an amount reasonably sufficient to pay the claims or expenses
for which the account is established. All monetary and investment assets not in such
9.1.7Maintenance of Sound Financial Condition. The Board of Trustees shall regularly monitor
es, expenses, and loss development, and evaluate its current and
expected financial condition.
(a) If necessary, the Board shall attempt, in good faith, to maintain or restore the
disposal, including, but
not limited to, adjusting premium rates, underwriting standards, dividend rates,
expulsion standards, and other powers granted by applicable Minnesota law or
rulesand this Agreement and Bylaws.
(b) financial
condition, the Commissioner shall, as appropriate, order an increase in premium
-insurance authority pursuant to Section 12.3.2
herein, or order than an assessment be levied against Participating Members
under Section 9.5 herein.
9.2 Reporting.
9.2.1 Financial Statements. The Board of Trustees shall prepare annual financial statements
containing a statement of net position; statement of revenues, expenses, and changes in
net position; and a statement of cash flows. Such statements:
(a) Shall be filed with the Commissioner no later than 60 days after the end of the
; and
(b) Shall be audited by an independent certified public accountant, who shall submit
a report to the Commissioner within 180 days of .
(c) Every second annual financial statement shall be accompanied by a statement
from a qualified actuary concerning the statement of net position items that are
statement and the scope of their review shall comply with
instructions.
Page 15 of 24
(d) The Pool shall file quarterly reports with the Commissioner, in the event the
integrity.
9.2.2 Annual Status Report.
Board of Trustees shall file with the Commissioner a statement describing any changes
that have occurred in the information filed with its initial application for authority to self-
insure or its most recent status report.
9.3 Joint and Several Liability.
9.3.1 Pool Liabilitiesand Expenses. Pursuant to Minnesota Rules, Part 2785.1400, subpart 1(A):
(a) Each current Participating Member shall be jointly and severally liable for all Pool
liabilities and expenses; and
(b) Each past Member shall continue to be jointly a
liabilities and expenses for three (3) complete Fund Years after leaving the Pool.
Each past Member shall
liabilities and expenses for a period of three (3) complete Fund Years after leaving
the Pool. After the period of continuing liability, past Members are no longer
pool liability is applicable.
9.3.2 Runoff Pool Liabilities and Expenses. All current Members participating in the Pool at the
time self-insurance authority ends continue to be jointly and severally liable
liabilities and expenses until the Pool is dissolved. All past Members that are jointly and
severally expenses at the time its self-insurance
authority ends continue to be jointly and severally liable until the Pool is dissolved.
9.4 Assessment. The Board of Trustees may levy an assessment against current and past Participating
Members under the following circumstances:
9.4.1 Assessment to Correct a Deficit
Board shall restore a positive Surplus within ninety (90) days by assessing all jointly and
severally liable current and past Participating Members according to the following
formula:
All jointly and severally liable Participating Members and past Participating
Members may be assessed proportionately to their share of the total premiums
paid and owed during the assessment base period. The assessment base period
-insurance authority ending, shall remain the basis of
assessments under this item until final Pool dissolution. The assessment base
period includes all completed quarters of the current fund year and includes the
most recent three complete fund years.
9.4.2 Assessment to Increase Surplus. The Board of Trustees may also forestall a deficit or to
by assessing all jointly and severally liable
Page 16 of 24
current Participating Members. The assessment may be calculated using any reasonable
procedure, consistent with these Bylaws
9.5 Cash Flow and Stop-Loss Insurance.
9.5.1 Cash Flow Difficulties. The Board of Trustees shall protect the Pool from cash flow
difficulties using methods that include, but are not limited to, the following:
(a) Establishing and maintaining a Surplus consisting of funds contributed by
Participating net position; or
(b) -loss insurance policy requiring the insurer
to advance funds to the Pool if the policy limits have been or are likely to be
potential liability for the policy period.
9.5.2 Stop Loss Insurance. The Pool may purchase excess or stop-loss insurance for
indemnification of a portion of its losses. If stop loss insurance is required pursuant to
Minnesota law, any such stop-loss insurance shall comply with Minnesota Rules, Part
2785.1300 and Minnesota Statutes, § 471.617. If the Pool determines that an excess or
stop-loss insurance policy will be terminated or modified causing a violation of applicable
egrity, the Pool shall notify the
Commissioner prior to the termination or modification taking effect and shall indicate
what corrective action will be taken.
9.5.3 Stop-Loss Requirements. The Board of Trustees shall comply with the following with
respect to any stop-loss insurance it purchases:
(a) If the Board elects to terminate or modify a stop-loss policy in a manner that
integrity, the Board shall notify the Commissioner prior to the effective date of
the termination or modification and indicate what corrective action will be taken.
(b) No liability transferred to a stop-loss insurer may, directly or indirectly, be
returned to the Pool or a Participating Member of the Pool.
9.6 Dividends. The Board of Trustees may, but shall not be required to, declare and pay dividends or
distributions from its Surplus subject to the following requirements:
9.6.1 Limitations. The Board shall not declare a dividend or distribution from Surplus if doing
so will cause the Surplus to be negative or if the Pool has a stop-loss advancement liability.
9.6.2 Allocation. Any dividend declared shall be allocated in proportion to each eligible
calculate the dividend.
9.6.3 Eligibility and Member Responsibilities. Only Members participating in the Pool at the
time a dividend or distribution is declared shall be eligible to receive the dividend or
distribution. If a dividend be distributed, each Participating Member shall be responsible
Page 17 of 24
for determining how the dividend or distribution shall be used in accordance with
applicable Minnesota law.
ARTICLE X. LIABILITY AND INSURANCE
10.1 Member Liability. Unless otherwise specified in this Agreement, no Participating Member shall be
liable for the acts or omissions of another Member. Nothing in this Agreement shall be construed
as a waiver of a Participating Mem
Chapter 466.
10.2 Trustee Liability.
10.2.1 Limitations. No Trustees shall be held liable for:
(a)Mistakesin judgment or other actionsmade, taken, or omitted by theTrusteein
good faith;
(b) Any action made, taken, or omitted by any Pool agent, employee, or independent
contractor selectedby the Trustees with reasonable care;
(c) Any loss incurred through investment or failure to invest Pool funds; or
(d) Any action taken or omitted by another Trustee.
No Trustee shall be required to give a bond or other security to guarantee the faithful
performance of their duties except as required by this Agreement or by law.
10.2.2 Defend and Hold Harmless. Pool assets shall be used to defend and hold harmless any
Trustee for actions taken by the Trustee within the scope of their authority. The Board of
Trustees shall purchase insurance providing fiduciary liability coverage for the Trustees.
10.2.3 Duties. The Trustees shall discharge their duties solely in the interest of the Pool and:
(a) For the exclusive purpose of providing benefits to Covered Persons and defraying
the reasonable expense of administering the Pool and the Plan(s);
(b) With the care, skill, prudence, and diligence under the then prevailing
circumstances that a prudent person in a like capacity and familiar with such
matters would use in conducting an enterprise of a like character and aims; and
(c) In accordance with the documents and instruments governing the Pool and
Plan(s) insofar as such documents and instruments are consistent with the law.
ARTICLE XI. DISPUTE RESOLUTION
11.1 Informal Dispute Resolution. The Board of Trustees shall seek to resolve any dispute between the
Pool and any Participating Member, or a dispute amongst Members, through informal discussion.
Such efforts shall be facilitated by the Chairperson, or, if the Chairperson has a conflict of interest
due to the nature of the dispute, by an alternate Officer or Trustee.
Page 18 of 24
11.2 Formal Dispute Resolution. If a dispute cannot be resolved through informal efforts, the Board
may refer the dispute to formal mediation facilitated by a mediator mutually acceptable to the
parties to the dispute. In the event the dispute cannot be resolved through mediation, the parties
to the dispute may pursue other reasonable procedures for resolution, including formal litigation.
ARTICLE XII. DURATION AND DISSOLUTION
12.1 Duration. Pursuant to Minnesota Statutes, § 471.59, subdivision 4, but subject to the provisions
herein regarding Member withdrawal, this Agreement shall be ongoing.
12.2 Merger. To the extent not prohibited by applicable law, the Board of Trustees may apply to merge
with any other plan or pool established under Minnesota law. The Board of Trustees shall solicit
the advice and counsel of the Labor Management Committee in considering any such merger.
12.3 Ending Self-Insurance Authority.
12.3.1 Voluntary Termination of Authority to Self-Insure. The Board of Trustees may elect to end
-insurance authority and cease to provide Coverage, provided such decision
is made at least 45 days before the end of the current Fund Year. The Board shall provide
notice of its decision to the Commissioner within fourteen (14) days.
12.3.2 Revocation of Authority to Self-Insure. The Commissioner shall, by order, revoke the
-
following events occur, and the Commissioner judges the event(s) to be material:
(a) Failure of the Pool to comply with applicable Minnesota statutes or rules;
(b) Failure of the Pool to comply with any lawful order of the Commissioner;
(c) Commission by the Pool of an unfair or deceptive practice as defined in
Minnesota Statutes, §§ 72A.17 to 72A.32, or in related rules;
(d) Deterioration o
obligations promptly and in full is or will be significantly impaired.
12.3.3 Runoff Period. The Poolshall continue to exist as a Runoff Pool after its authority to self-
insure has ended for purposes of paying claims, preparing reports, and administering
transactions associated with the period in which the Pool provided Coverage. The Runoff
Pool shall continue to comply with applicable Minnesota statutes and rules. No Members
shall be permitted to join, leave, or be expelled from the Pool during the runoff period.
12.4 Dissolution.
12.4.1 Authorization to Dissolve. The Board of Directors shall not dissolve the Pool or Runoff Pool
without requesting authorization from the Commissioner. The Commissioner shall grant
the request within 60 days of receipt if either of the following conditions are met:
(a) The Pool demonstrates that it has no outstanding liabilities, including incurred
but not reported liabilities; or
Page 19 of 24
(b) The Pool has obtained an irrevocable commitment from a licensed insurer that
provides for payment of all outstanding liabilities and provision of related
services, including claims payment, preparation of reports, and the
administration of transactions associated with the period when the Pool or
Runoff Pool provided Coverage.
12.4.2 Pool Assets and Liabilities Upon Dissolution. Upon receipt of authorization to dissolve, the
to Participating Members as follows:
upon final dissolution of the Pool, all property purchased or owned pursuant to this
Agreement shall be sold and the proceeds thereof, together with all other assets not
necessary for satisfaction of obligations, shall be distributed in accordance with
applicable law to the Participating Members. The amount distributed to each
Participating Member shall be based on the following two-step formula:
Step 1. 70% of remaining assets will be distributed based on the ratio of (1) the
total consecutive Member Months associated with each Participating
Member during the final 120 months of coverage provided by the Pool
and, if dissolution occurs prior to January 1, 2032, the
(the Sourcewell Risk Management Pool), divided by (2) the total Member
Months for all Participating Members in the Pool during the final 120
months of such coverage.
month of coverage for each Employee, Dependent, and Former
Employee receiving coverage through the Pool and/or the Sourcewell
Risk Management Pool.
Step 2. 30% of remaining assets will be distributed only to Participating Members
who have annual premiums in the last 12 months of coverage greater
than the Community Rate of the entire Pool. 30% of remaining assets will
be distributed based on the ratio of (1) the amount of annual premium
paid by the Participating Member in the last 12 months of coverage that
exceeds the Community Rate, divided by (2) the total amount of annual
premium paid by all Participating Members that exceeds the Community
Rate. Community Rate is calculated by determining the average
premium amount for each Participating Member needed to fund the
composition and the geography of each respective Participating Member.
ARTICLE XIII.GENERAL PROVISIONS
13.1 Record Keeping. The Board of Trustees shall maintain within Minnesota all records necessary to
verify the accuracy and completeness of all reports submitted to the Commissioner under
Minnesota Rules, Part2785.1600. All records concerning claims, reserves, financial transactions,
and other matters necessary for Pool operations are the property of the Board of Trustees.
13.2 Notice. Any notice required by this Agreement shall be in writing and shall be deemed to have
been given when deposited in a U.S. Post Office, registered or certified mail, postage prepaid,
return receipt requested and addressed as follows:
If to the Board of Trustees or the Pool: Better Health Collective
Page 20 of 24
th
202 South 12 Street NE
PO Box 219
Staples, MN 56479
If to a Member: To the address set forth in Appendix A or to such other address as any party to
this Agreement may, from time to time, specify in writing to the other parties and to the Pool.
Any notice required by this Agreement may be waived by the party or parties to whom such notice
is required to be provided hereunder.
13.3 Section Headings. The section headings inserted in this Agreement are for convenience only and
are not intended to, and shall not be construed to, limit, enlarge, or affect the scope or intent of
this Agreement or the meaning of any provision thereof.
13.4 Validity and Savings Clause. In the event any provision of this Agreement shall be declared by a
final judgment of a court of competent jurisdiction to be unlawful, unconstitutional, or invalid as
applied to any Member, the lawfulness, constitutionality, or validity of the remainder of this
Agreement shall not be deemed affected thereby.
13.5 Counterparts. This Agreement and any amendments thereto may be executed in any number of
counterparts which taken together constitute a single instrument. New Members approved for
participation in the Pool after the Effective Date of this Agreement shall sign the Agreement and
their names and contact information shall be added to Appendix A without the need to amend
the Agreement as a whole.
13.6 Amendment. The Board of Trustees may, in accordance with Section 5.2 herein, amend this
Agreement and such amendment shall be evidenced in writing and executed by the Members.
13.7 Minnesota Law. This Agreement shall be governed by, and the Pool and Plan(s)) shall be operated
in accordance with Minnesota Law, including Minnesota Statutes, Chapters 13, 13D, 60A, 62A,
62E, 62L, 70A, 72A, 72C, and 471.
13.8 Other Applicable Law. The Pool and the Plan(s) shall be operated in accordance with applicable
federal law, including the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and
the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), as it applies through the
Public Health Services Act (PHSA).
13.9 Entire Agreement. All agreements, covenants, representations, and warranties among the
Members expressed or implied, oral or written, concerning the subject matter of this Agreement
are contained herein. All prior or contemporaneous conversations, negotiations, agreements,
representations, covenants, and warranties concerning the subject matter of this Agreement are
merged into this Agreement. Union contracts, negotiations, and the like are expressly outside the
subject matter of this Agreement, are not merged into this Agreement, and remain the sole
responsibility of each Member, and not the Board of Trustees or the Pool.
Page 21 of 24
CERTIFICATION
The undersigned, the \[Secretary of the Board\] hereby certifies that the foregoing Membership
Agreement and Bylaws were adopted pursuant to a resolution of the Members, effective as of \[DATE\].
______________________________
Ν{ĻĭƩĻƷğƩǤΞ
Page 22 of 24
AGREEMENT
Pursuant to all applicable state and federal laws, this Membership Agreement and Bylaws of Better
Health Collective has been approved by the governing board of the undersigned party as evidence by
the signatures below.
PARTICIPATING MEMBER SOURCEWELL HEALTH BOARD OF TRUSTEES
_____________________________________
City of Elk River
Name of Participating Member
_____________________________________ ______________________________________
Authorized signature Authorized Signature
John Dietz, Mayor
____________________________________________________________________________
Name/Title Name/Title
July 18, 2022
________________________________ ________________________________
DATE DATE
Tina Allard, City Clerk
Page 23 of 24
APPENDIX A
MEMBERS AND ADDRESSES
Page 24 of 24