REDLINE OF TRACKED CHANGES OF DECLARATION OF BENEFITS TRUST (BOS AGENDA EXHIBIT C).PDF

REVISED AND RESTATED DECLARATION OF TRUST FOR
MARICOPA COUNTY, ARIZONA
SELF-INSURED BENEFITS TRUST FUND
Pursuant to ArizonaThis Revised Statutes § 11-981, thisand Restated
Declaration of Trust for Maricopa County, Arizona Self-Insured Benefits Trust Fund (the
“Declaration of Benefits Trust” or “Benefits Trust”), dated and effective this ____ day
of ________, 20112016, is adopted byentered into by and between Maricopa County, a
political subdivision of the State of Arizona (the “County”), and the individuals who
serve as trustees of the Benefits Trust (hereafter, with their successors, the “Trustees”),
to administer the Benefits Trust as provided for herein.
RECITALS
A. A. Arizona Revised Statutes (“A.R.S.”) § 11-981 authorizes Maricopathe
County (the “County”) to establish a self-insurance program for the management and
administration of a system for direct payment of benefits, losses and claims or any
combination of insurance and direct payments, and including risk management
consultation, to provide health, accident, life, and/or disability benefits, including mental
health and substance abuse diagnosis and treatment, for to employees and officers of
the County, including and their dependents of employees and officers as outlined in this
Declaration of Benefits Trust.
B. B. On or about July 1, 2008, the County established a self-insurance
program for the management and administration of a system for direct payment of
health, accident, life and/or disability benefits, which has beenwas governed pursuant
toby the terms of the Revised Restated Declaration of Trust for Maricopa County,
Arizona Self-Insured Trust Fund (the “Risk Trust”). Through thisthe Declaration of
Benefits Trust, the for Maricopa County desires to separate, Arizona Self-Insured
Benefits Trust Fund dated January 26, 2011, the County separated the governance of
the Benefits Trust from the Risk Trust in accordance with action taken by the Maricopa
County Board of Supervisors (the “Board”) in a public meeting.
C. The County is authorized pursuant to A.R.S. § 11-981 to do each of the
following things (collectively, the “Authorized Actions”):
1. Manage and administer a system for direct payment of health,
accident, life, or disability benefits, including mental health and substance abuse
diagnosis and treatment, for employees and officers of the County, including
dependents of employees and officers.
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2. Designate a risk management consultant or insurance administrator
(“Administrator”) licensed pursuant to Title 20, Chapter 2, Article 3 or 9, Arizona Revised
Statutes, if such license is verified by the County Board of Supervisors.
3. Enter into contracts or agreements required for the management or
administration of the Benefits Trust.
4. Establish terms and conditions of coverage, including setting rates and
determining exclusions from coverage.
5. Ensure that all claims eligible for payment through the Benefits Trust
are paid promptly.
6. Take all necessary precautions to safeguard the assets of the Benefits
Trust Fund.
D. The County desires to establish this Benefits Trust to carry out the Authorized
Actions.
Article 1. General Terms.
1.1. Recitals. The Recitals set forth above are true and correct and
incorporated herein.
1.2. Effective Date. has been administered successfully. This Benefits Trust
shall become effective upon the completion of the Authorizing Action described in
Section 1.5 below, and shall continue until this Benefits Trust is terminated by the
County as described in Article 9 below.
1.3. Purpose. The purpose of this Declaration of Benefits Trust is to carry out
the Authorized Actions. In furtherance of such purpose, the County and the Board of
Trustees appointed pursuant to Sections 3.1 and 3.2, below, shall operate the Benefits
Trust according to the terms and conditions set forth in this updates, restates and
revises the Declaration of Benefits Trust.
1.4. Conformity with Law. If any term or provision of this Declaration of
Benefits Trust conflicts with or violates any state or federal law, as they now exist or are
hereafter amended, this Declaration of Benefits Trust shall be automatically deemed
amended to conform to such laws.
1.5. Authorizing Action. The Benefits Trust shall become effective only upon:
(a) the determination of legal counsel for the Board of Supervisors that this Declaration
of Benefits Trust is in proper form and within the powers and authority of the Board, and
(b) the approval of the Board of Supervisors.
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1.6. Reservation of Authority. Nothing contained herein shall modify or restrict
the legal authority of the Board of Supervisors to administer and operate appropriate
insurance programs for the County.
1.7. Definitions.
1.7.1. “Administrator” means the Benefits Trust Administrator appointed in
accordance with the terms of this Benefits Trust. Any Administrator appointed
hereunder must be licensed as required by Title 20, Chapter 2, Article 3 or 9, Arizona
Revised Statutes, and such license shall be verified by the Board.
C. 1.7.2. “Benefits Trust” means the Maricopa County, Arizona, Self-Insured
Benefits Trust Fund dated January 26, 2011.
1.7.3. “Board” or “Board of Supervisors” means the Board of Supervisors
as the governing body of Maricopa County, Arizona.
1.7.4. “Clerk” means the Clerk of the Board of Supervisors of Maricopa
County, Arizona.
1.7.5. “County” means Maricopa County, Arizona.
1.7.6. “Expenditures” means all disbursements made from the Benefits
Trust and authorized by the Trustees for the management and administration of a
program of health and welfare benefits as authorized by A.R.S. § 11-981.
1.7.7. “Health and Welfare Benefits Program” means the Maricopa
County self-insured health and welfare benefits program that provides for direct
payment, or any combination of insurance and direct payment, for health, accident, life,
or disability benefits, losses, or claims for County employees and officers and their
dependents.
1.7.8. Accordingly, the County agrees as follows:
ARTICLE 1: Definitions
1.1 “Benefits Trust” means the trust established pursuant to this Declaration
of Benefits Trust including any amendments, modifications and restatements, together
with the assets of the Benefits Trust, in whatever form or location, including all bank
accounts, savings accounts and certificates together with all investments made and
held in the trust, all monies received by the trust and any other property received and in
the trust for the uses and purposes set forth in this Declaration of Benefits Trust.
1.2 “Participant” means a County officer, an employee, retiree, or their
dependents,elected official, dependent, COBRA beneficiary, or other person determined
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to be an eligible to participateparticipant in the Health and who has electedWelfare
Benefits Program.
1.3 “Plan” means the arrangement pursuant to which the County provides
self-insured programs to participate in the Participants, including, but not limited to,
health and disability benefits.
1.4 “Plan Administrator” means the person or entity identified as the Plan
Administrator in the Plan.
1.5 “Health and Welfare Benefits Program, including an officer, employee,
retiree, or their dependents, of a special district that is a party to an intergovernmental
agreement with the County that provides for County benefits eligibility for such persons.”
means the program of benefits established by the Board that provide for benefits that
may include, but shall not be limited to, health, wellness, accident, life, and disability,
and any other legally authorized benefits as determined by the Board, whether through
the Plan or group-insured programs or both.
1.7.9. “Treasurer” means the Maricopa County Treasurer.
1.7.10. “Trustee” or “Trustees” means the original group of individuals
appointed by the Board or its designee to administer the Benefits Trust, and their duly
appointed successors.
1.8.ARTICLE 2: Purpose and Application of the Benefits Trust
Establishment. The Benefits Trust shall not discriminate against any individual in
any way on accounthas been established, and consists of such individual’s race, color,
religion, sex, age, disability, or national origin.
1.9. All purchasesmonies as the County may deposit from time to time in the
Benefits Trust, and in such accounts as are used to hold and invest the monies of the
Benefits Trust shall comply with the Maricopa County Procurement Code. The Benefits
Trust shall work with the Materials Management Department to contract for purchases
within the Director of Materials Management’s authority. Payment for materials and
services for which ; plus all other money or property that lawfully becomes a part of the
Benefits Trust contracts shall be the exclusive obligation of the Benefits Trust.
2.1 1.10. This; plus all earnings, income, gains, appreciation and all other
increments of any nature from the foregoing; and less payments made pursuant to this
Declaration of Benefits Trust, including any schedules or exhibits attached hereto, shall
constitute the entire.
Benefits Trust. The Benefits Trust shall be held and invested by the Maricopa
County Treasurer or such other person or entity as the Board may select, consistent
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with this Declaration of Benefits Trust and supersedes all other understandings, oral or
written, related to the governance of the Benefits Trust Fund. This Declaration of
Benefits Trust may be amended or modified only by the Board, with notice to and in
consultation with the Board of Trustees.
Article 2.in accordance with applicable law and County policies. The Benefits Trust
Fund.
2.2 2.1. Benefitsshall be kept separate from the Risk Trust Fund. The
parties hereto acknowledge that the Benefits Trust Fund has been created, and that the
assets of the Benefits Trust Fund are held by the Maricopa County TreasurerCounty
Treasurer shall submit reports to the Trustees and the Board as appropriate.
2.3 2.2. Purpose of Benefits Trust Fund.. The Benefits Trust Fund shall be
used for the purpose of administering, staffing, managing, and funding the Health and
Welfare Benefits Program for the benefit of Participants as authorized by A.R.S. § 11-
981.
2.3. Manner of Financing. The Benefits Trust Fund may be funded by allocation
of funds from general fund and non-general fund departments and special taxing
districts, employee contributions, gifts, grants, by any special taxes levied to satisfy
judgments, payment of claims or other involuntary indebtedness and by monies
recovered from litigation, statutory liens, recovery from insurers, subrogation, salvage
value of damaged property, and interest earned on the funds held by the Benefits Trust.
Additionally, the Benefits Trust may be funded through other available financial
techniques and methods permissible under state or federal law and authorized by the
Board and the Trustees.
Article 3. The Board of Trustees.
3.1. Trustees, Number, Term of Office, Qualifications, and Compensation.
2.4 3.1.1. Equal Opportunity. The Benefits Trust shall not discriminate
against any individual in any way on account of such individual’s race, gender, religion,
color, national origin, age, disability, sexual orientation, pregnancy, veteran status,
genetic information or any other characteristic defined by law or Board approved policy.
2.5 Procurement. All purchases funded by the Benefits Trust shall comply
with the Maricopa County Procurement Code. Payment for materials and services
contracted by the County on behalf of the Benefits Trust shall be the exclusive
obligation of the Benefits Trust.
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ARTICLE 3: Organization and Operation of the Trustees
3.1 Number and Identity. The Benefits Trust shall be administered by no
fewer than six (6) joint trustees, all of whom shall be citizens of the United States of
America, and residents of Maricopa County, Arizona, and . All Trustees shall be at least
21 years of age. The Trustees shall be reasonably familiar with the subject matter of
the and no person shall qualify as Trustee until he or she has received a written
appointment and, which shall be appointed as follows:recorded with the Clerk of the
Board and the records of the Benefits Trust.
3.1.1.1. Five (5) members of the Board of Trustees shall be
appointed by the members of the Board of Supervisors to serve four (4) year terms. 2
Appointment. Each supervisorial district shall have be represented by one
appointment. The individuals(1) Trustee, who shall have been appointed by the Board
memberssupervisor of that district and approved by the Board. The Trustees appointed
by the supervisors shall not be employees or elected officials of the County.
3.1.1.1.1. In the event that a Board member does not
appoint an individual to serve as a Trustee within 30 days of the execution of this
Benefits Trust, the or the Maricopa County ManagerSuperior Court, and shall appoint
anot be eligible to receive benefits in their own right or as a dependent of another
person to fill the vacant Trustee position.
3.1.1.1.2. In the event that neither a Board member nor the
County Manager appoints an individual to serve as a Trustee within 60 days of the
execution of this Benefits Trust, the Administrator shall appoint a person to fill the
vacant Trustee position.
3.1.1.2. The County Manager shall appoint one County employee
to serve as a Trustee for an indefinite term.
3.1.1.3. The Trusteesunder any aspect of the Health and Welfare Benefits
Program. They should have experience in at least one of the following areas: health
care administration, benefits plan administration, health insurance administration, or
financial analysis. In addition, the County Manager, or his or her designee, shall serve
as a Trustee. The County Manager’s designee is subject to the approval of the Board,
and shall possess the following qualifications: (i) the designee shall be an employee of
the County or the Arizona Superior Court, in and for Maricopa County; (ii) the designee
shall report directly to the County Manager with respect to this appointment; and (iii) the
designee shall be reasonably familiar with the subject matter of the appointment.
3.1.2. No person shall qualify3 Term. Unless terminated earlier as
described in this Article, the term of office for a Trustee until he or she has received a
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written appointment pursuant to Section 3.1.1, whichshall be for four (4) years, except
that the designee of the County Manager shall be lodgedserve for an indefinite term,
subject to removal and substitution by the Board with the Clerk and records of the
Benefits Trust.
3.1.3. Uponor without cause. Any Trustee may be reappointed by the Board
upon expiration of his or her term, or upon the expiration of his or her term, any Trustee
may be reappointed or continue to serve until his or her replacement issuccessor has
been appointed.
3.1.4. Trustees shall not be entitled to receive compensation for their
services as Trustees, except Trustees shall be entitled to reimbursement for any
reasonable out-of-pocket cost and expenditures made by the Trustees in the
performance of their duties as Trustees.
3.4 Termination. The term of any Trustee will automatically terminate upon
the earliest of the following: death; resignation; removal; failure to attend three
consecutive meetings; and, for the County Manager’s designee, upon separation of
employment.
3.1.5. Resignation. A Trustee may resign at any time by giving notice in
writing to the remaining Trustees, the Board, and the County Manager. Such
resignation shall take effect not later than 60 days from the date it is received.
3.1.6. 3.6 Vacancies. Any Trustee may be removed with or without cause
upon written notice delivered to the Trustee from the individual or body that appointed
the Trustee.
3.1.7. The Trustees shall be bonded or insured. This requirement may be
satisfied by the blanket performance bond or other coverage provided by the County.
3.1.8. The Trustees shall comply with the provisions of Title 38, Chapter
3, Article 8, Arizona Revised Statutes regarding conflict of interest of officers,
employees, and relatives, as well as any other applicable law regarding conflict of
interest.
3.1.9. The Trustees shall elect from their members a Chair. The Chair
shall be elected by a majority of the Trustees administering the Benefits Trust.
3.1.10. The Chair of the Board of Trustees shall serve a two (2) year term
as Chair. The Chair may resign as Chair before the expiration of the two (2) year term
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by giving written notice to the Trustees. Such resignation shall take effect not later than
60 days from the date received. The Chair may be removed as Chair upon a vote of the
majority of the Trustees. A Trustee may be elected to successive terms as Chair.
3.2. Vacancy on the Board of Trustees.
3.2.1. The resignation, incompetency, death, removal, or termination of
any or all of the Trustees shall not terminate the Benefits Trust or affect its continuity.
3.2.2. During a vacancy, the remaining Trustee or Trustees may exercise
the power of the Trustees hereunder.
3.2.3. Vacancies among the Trustees shall be filled by a written appointment
and in the manner provided in Section 3.1.12 above.
3.7 Removal. Any Trustee may be removed with or without cause upon
written notice delivered to the Trustee from the individual or body that appointed the
Trustee.
3.8 Chair. The Trustees shall elect from their members a Chair. 2.4.
If, at any time, by reason of resignation, removal, incompetency, or death, thereThe
Chair shall be no remaining Trustees, elected by a majority of the Board of Supervisors
and County Manager shall forthwith appoint successor Trustees as provided in Section
3.1.1 above.
3.3. Meetingsand may be removed upon a vote of the majority of the Board of
Trustees. The Chair shall serve a two (2) year term and may be elected to successive
terms.
3.9 Conflicts of Interest. Each Trustee shall comply with Arizona conflict of
interest laws for public officers and employees as set forth in A.R.S. § 38-503, as well
as any other applicable law regarding conflicts of interest.
3.10 No Compensation. The Trustees shall not be entitled to compensation for
their services, but shall be entitled to receive reimbursement for any reasonable and
necessary out-of-pocket expenses incurred in performance of their duties.
3.3.1. 11 Meetings. The Trustees shall meet as frequently as they shall
determine necessary and appropriate, but not less than quarterly. Meetings may be
conducted by teleconference, video-conference, or by other electronic means of
communicationin person, by teleconference, video conference, or by other electronic
means of communication. The Chair, any two Trustees, the Plan Administrator, or the
Benefits Finance Manager may call a meeting at any time upon two (2) days’ notice,
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either written or verbal, except in the case of an actual emergency, in which event a
meeting, including an executive session, may be held on such notice as is appropriate
to the circumstances. All meetings shall be subject to applicable statutes, rules and
regulations, including Arizona’s Open Meeting Law, A.R.S. § 38-431 et seq.
3.3.2. The Chairman may call a meeting at any time upon two (2) days’
notice, either written or verbal. Any number of Trustees fewer than a quorum may call a
meeting upon two (2) days’ notice, either written or verbal, to the other Trustees.
3.3.3. The Chairman shall establish the date, time, and place of the
meetings of the Trustees, and shall provide an agenda of subject matter to be covered
during the meeting. All meetings shall take place in Maricopa County, Arizona and shall
be subject to all applicable statutes, rules, and regulations pertaining to public meetings,
including but not limited to the Arizona Open Meetings Law, Title 38, Chapter 3, Article
3.1, Arizona Revised Statutes.
3.3.4. 3.12 Quorum. A majority of appointed Trustees constitutes a quorum.
3.13 Action. The Trustees may act only during a formal meeting of the
Trustees, except in case of an emergency, as determined by the ChairmanChair or a
majority of the Trustees, during which the Trustees may act without a meeting subject to
ratification and confirmation of the act at the next meeting of the Trustees. Each
Trustee shall have one vote. All actions by the Trustees shall require affirmative votes
of a majority of a quorum of Trustees to have any weight or effect.
3.14 Minutes. The Trustees shall maintain minutes of their meetings.
3.15 Bonding. The Trustees shall be bonded or insured.
3.3.5. At all meetings of the Trustees, a majority of the Trustees then
serving shall constitute a quorum for the transaction of business. The act of a majority
of the Trustees present at any meeting at which there is a quorum shall be the act of all
Trustees, except as may be otherwise specifically provided by statute. If a quorum is
not present at any meeting of the Trustees, the Trustees present may recess the
meeting from time to time until a quorum is present. At such resumed meeting at which
a quorum is eventually present, any business may be transacted which might have
been transacted at the meeting originally noticed, provided that, to the extent applicable,
the requirements of the Arizona Open Meetings Law are met.
3.3.6. The Trustees shall maintain minutes of their meetings.
3.3.7. Any action by a majority of the Trustees in office shall be
conclusive and binding as an action of the Board of Trustees. All agreements, checks,
documents, reports, and any and all other instruments executed by a majority of the
Trustees or executed by one Trustee or an authorized agent of the Benefits Trust,
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pursuant to authorization of a majority of the Trustees given either at a meeting or in
writing, shall be effective and binding as if executed by all of the Trustees.
Article 4. Duties of the County.
The County shall:
4.1. Deposit all monies received for the purpose of funding the Health and
Welfare Benefits Program, including, but not limited to, contributions collected from
Participants through payroll deductions and County contributions, into the Benefits Trust
Fund for the purposes set forth in this Declaration of Benefits Trust.
4.2. Provide staff from its Department of Business Strategies and Health Care
Programs, Office of Management and Budget, and such other departments of the
County necessary to help the Trustees with the day-to-day operations of the Trust Fund.
4.3. Fill all vacancies of members of the Board of Trustees as required by this
Declaration of Trust.
Article 5. Powers and Duties of the Board of Trustees.
The Board of Trustees shall:
5.1. Adopt policies, rules, and procedures to enable the Benefits Trust to do all
such lawful acts and things permitted by this Declaration of Benefits Trust.
5.2. Use the monies deposited in the Benefits Trust Fund to administer, staff,
manage, and fund the Health and Welfare Benefits Program for the Participants for any
purpose permitted by law, including, without limitation, investment and payments (a) for
losses or claims, (b) for insurance, (c) for risk management consultations related to
health and welfare benefits or this Declaration of Benefits Trust, (d) for stop loss
insurance, (e) on behalf of qualified Participants, (f) for vision and dental care, wellness
programs and any similar or related health and welfare plans or programs that may be
administered under the Benefits Trust.
5.3. Delegate in writing to the Administrator the power and authority to carry out
the day-to-day administration of the Benefits Trust.
5.4. As long as required by law, maintain or cause the Trust Fund to be
maintained by the Treasurer or such other financial institution as the Board may
reasonably select, consistent with the requirements of this Declaration of Benefits Trust.
5.5. Cooperate with the Administrator in accordance with A.R.S. § 11-981.
5.6. Employ such other professionals as are necessary to accomplish the
purposes of the Benefits Trust, including professionals to provide accounting and
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auditing services, financial advisory services, health care claims services, investment
services, legal services, and other advisory services.
5.7. Cause staff made available by the County’s Finance Department to prepare
the financial statement for the annual audit required by A.R.S. § 11-981 and provide to
such staff all information necessary to prepare such statement in accordance with
generally accepted accounting principles.
5.8. Assist the County and the external auditor retained pursuant to A.R.S. § 11-
981 with the annual audit required by law (the “Annual Report”).
5.9. Cause the Annual Report to be maintained in the offices of the Clerk for a
period of not less than ten (10) years.
5.10. ReviewThis requirement may be satisfied by a blanket performance bond
or other coverage provided or procured by the County.
3.16 Non-Liability. Except as otherwise provided by law, no Trustee shall be
individually liable for any act or omission in the conduct of his or her duties with respect
to the Benefits Trust unless such act or omission is due to the Trustee’s own gross
negligence, bad faith, and/or willful and wanton misconduct.
3.17 Indemnification. Any person who is or has served as a Trustee shall be
indemnified, defended, and held harmless from and against all claims and liabilities,
whether they proceed to judgment or are settled, to which such Trustee may become
subject, by reason of his or her being or having been a Trustee; provided, however, that
no Trustee shall be indemnified or reimbursed in relation to any matter for gross
negligence, bad faith, and/or willful and wanton misconduct in the conduct of his or her
duties.
3.18 Legal Advice. The Trustees shall seek legal advice from and through the
County Attorney when legal advice is deemed necessary. In the event that the County
Attorney cannot provide legal advice, due to conflict of interest or otherwise (as
determined by the Board), private outside counsel shall serve in his or her place and
stead. The Trustees may make recommendations to the Board with respect to
appointment of outside counsel.
ARTICLE 4: Powers and Duties of the Trustees
4.1 Responsibilities and Authority Assigned to the Trustees. The Trustees are
delegated the responsibility for and are authorized to exercise the following duties and
authority in their role as Trustees:
4.1.1 Providing general financial oversight of the Benefits Trust and
serving in an advisory capacity to the Board.
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4.1.2 Reviewing quarterly the financial position of the Benefits Trust Fund
to ensure sufficient funds exist to pay outstanding and future benefits, losses, or
claimsand claims and to pay for risk management consultation.
5.11. Consult with the 4.1.3 Providing input and recommendations to
the Board of Supervisors, County Manager, and Administrator on financial and other
issues relating to the Health and Welfare Benefits ProgramPlan, including
appropriatetotal Plan premiums and rates for Participants. The Trustees shall, in
consult with the Benefits Finance Manager, determine the recommended total
premiums no less frequently than annually, and make such recommendations to the
Board for approval.
5.12. Comply with all applicable requirements of local, state, and federal law
relating to county self-insurance programs for the management and administration of
employee health and welfare benefits.
5.13. Return all assets in the Benefits Trust Fund to the County for deposit in its
general fund upon dissolution of the Benefits Trust under Article 9 below.
5.14. Collect, hold, and maintain deposits from the County4.1.4
Determining recommended funding levels and reserve requirements and
amounts for the Plan, so long as they are based on generally-accepted actuarial
methods, adequate and appropriate for the Benefits Trust’s self-insured retention
program, and are at least equal to estimated claims incurred but not reported. The
Board may provide direction on the recommended funding levels and reserve
requirements from time to time.
4.1.5 Providing input and recommendations to the Board, as needed or
requested, on an adequate and appropriate provision for stop-loss insurance for self-
insured liability, contingent on maintaining recommended Benefit Trust reserves.
4.1.6 Making recommendations to the Board on premium holidays,
subsidies, and/or refunds, so long as such recommended premium holidays, subsidies
and/or refunds do not reduce Benefit Trust reserves below the recommended level
without a sound contingency to cover any shortfall in the Benefits Trust Fund for the
purposes set forth in . All such recommendations shall be subject to the review and
approval of the Board.
4.1.7 Providing input and recommendations to the Board on
modifications of the terms and conditions of this Declaration of Benefits Trust.
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5.15. Receive additions to4.1.8 Adopting any policies, rules, or procedures
necessary for the assetsadministration of the Benefits Trust Fund.
5.16. Provide for the investment of Benefits Trust monies in a manner
consistent; provided that such policies, rules and procedures are not inconsistent with
the provisions of Title 35, Chapter 2, Article 2.1, Arizona Revised Statutes.
5.17. Make arrangements for payment of eligible claims in a manner
designated by the Administrator, including by wire or other transfer to the designated
accounts of each health and welfare benefits administrator (“HWBA”), in accordance
with this Declaration of Benefits Trust and any agreement between the County and the
HWBA then in effect. or applicable state and federal law.
5.18. Pay taxes, assessments, reasonable insurance premiums, and reasonable
administrative expenses of each HWBA and any other expenses incurred in the
collection, care, administration, and protection of the assets of the Benefits Trust Fund.
5.19. Subject to the limitations set forth in schedule A, prosecute in the
name of the County, defend, or compromise4.1.9 Reviewing and making
determinations concerning the acceptance of the annual audit, and request, as
appropriate, that specific items be reviewed in conjunction with the annual audit or as a
special audit.
4.1.10 Prosecuting, defending and compromising actions, claims, or and
proceedings for the protection of the assets of the Benefits Trust Fund and the exercise
of the powers vested in the Trustees under this Declaration of Benefits Trust, including,
but not limited to, actions for recovery of the cost of medical care and treatment
pursuant to A.R.S. § 12-962 and other applicable law. § 12-962 and other applicable
law. The Trustees shall have the authority to compromise actions, claims or
proceedings against the County for the protection of the assets of the Benefits Trust up
to $200,000. The Trustees shall have the authority to compromise demands or claims
for recovery under the Plan of all subrogation, restitution, salvage and related claims,
including reimbursement of the cost of medical care and treatment, when the settlement
amount is between $100,000 and $200,000 less than the amount that the County or its
authorized agent has demanded in reimbursement. The Board reserves the right to
engage and authorize third party administrators to perform recovery services under the
Plan for overpayments, third party liability, subrogation, and abusive and fraudulent
claims, and to delegate to such contractors the discretion and authority over whether to
pursue amounts at issue up to a threshold amount as determined by the Board.
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5.20. Execute and deliver all instruments that will accomplish or facilitate 4.2
Responsibilities Not Assigned to the exerciseTrustees. The Trustees shall have no
authority or responsibility for the following:
4.2.1 Designing, adopting, amending, or terminating the Plan or any
aspect of the powers vestedHealth and Welfare Benefits Program;
4.2.2 Ensuring that the Plan or any aspect of the Health and Welfare
Benefits Program complies with applicable state or federal laws;
4.2.3 Selecting or procuring services or products for the Plan or any
aspect of the Health and Welfare Benefits Program, including, but not limited to, service
providers and insurance;
4.2.4 Determining what portion of Plan premiums and any other aspects
of the Health and Welfare Benefits Program should be paid by Participants and what
portion should be paid by the County; or
4.2.5 Collecting premiums from Participants.
Unless otherwise delegated in the Board of Trustees under this Declaration of Benefits
Trust. , authority and responsibility for the foregoing items in this Section rest with the
Board, which may delegate this authority and responsibility to County staff and/or third
parties.
5.21. In the event that the some or all of the assets of the Benefits Trust Fund
are deposited with a financial institution other than the Treasurer, cause that financial
institution to make available to the Board of Trustees on at least a monthly basis
statements that identify all Benefits Trust Fund transactions made as of the date of the
statement, including such supporting documentation or detail as the Board of Trustees
or its authorized designee may reasonably request.
5.22. Designate appropriate personnel made available by the County, who are
independent from those involved in paying claims submitted to the Benefits Trust, to
review the statements described in Section 5.21 in a reasonable manner and otherwise
comply with the oversight provisions set forth in the Sections 5.7-5.10 above.
5.23. Cause the Administrator or his or her designee to be provided with all
reports, financial statements, and other information regarding the Benefits Trust Fund or
any HWBA, as the Administrator or designee may reasonably request.
5.24. Cause a financial institution holding any of the Benefits Trust Fund assets
to waive in writing any right of setoff against the assets of the Benefits Trust Fund.
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5.25. Cause all other appropriate actions to be taken in connection with the
Benefits Trust Fund and this Declaration of Benefits Trust that are necessary to carry
out its obligations hereunder.
5.26. Conduct all activities, including delegation of any of its duties, solely in a
manner consistent with its fiduciary responsibilities.
Article 6. Standard of Care of Board of Trustees.
In dealing with the assets of the Benefits Trust Fund, the Board of Trustees shall follow
the prudent investor rule. The Trustees shall use the judgment and care under the
circumstances then prevailing that persons of prudence, discretion, and intelligence
would exercise in the management of their own affairs. This standard of care shall
apply to all matters involving the Benefits Trust, including investment and or the
permanent disposition of funds, considering the probable income as well as the
probable safety of the capital of the Benefits Trust.
Article 7. Powers and Duties of Administrator.
7.1. The County Manager or the County Manager’s designee shall appoint the
Administrator of the Benefits Trust. The Administrator shall be in charge of and
responsible for the operation of the Benefits Trust.
7.2. The Administrator shall develop and propose to the Board of Trustees for
adoption policies, rules, and procedures to enable the Benefits Trust to do all such
lawful acts and things permitted by this Declaration of Benefits Trust.
7.3. The Administrator shall establish adequate and appropriate reserves for
the Benefits Trust’s self-insured retention program. The reserves may include an
allowance for claims incurred but not reported.
7.4. Any self-insured retention program established by the Administrator shall
conform to the provisions of this Benefits Trust and applicable law to provide health,
dental, long-term care, life, disability, or other welfare benefits, annuities, mental health
and substance abuse diagnosis, counseling, and treatment for Participants.
7.5. The Board directs and authorizes the Administrator to establish a program
for disbursements to be made for the benefit of and on behalf of the County, which
program will approve for payment of any and all reasonable expenditures necessary to
establish and administer the Benefits Trust, including but not limited to:
7.5.1. Pay all reasonable costs and expenses of Benefits Trust
administration.
7.5.2. Pay all reasonable legal fees, expenses, and costs incurred in connection with
ARTICLE 5: Management of the Benefits Trust
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5.1 Day-to-Day Management. Subject to specific delegation of duties set forth
below, the day to day management and administration of the Benefits Trust shall be
provided by the Plan Administrator, Benefits Finance Manager, County staff and
officials, and third-party administrators under contract with the County, who will submit
reports as appropriate to the Trustees and the Board.
5.2 Plan Administrator. The Plan Administrator is delegated responsibility for:
5.2.1 Day to day management and administration of the Benefits Trust.
7.5.3 Pay all reasonable insurance premiums for the fully-insured welfare
benefits provided under the Health and Welfare Benefits Program.
7.5.4. Pay all reasonable actuary, consultant, audit, and insurance
broker’s fees, expenses, and costs incurred in connection with the Plan, including
oversight of the administration of the Benefits Trust.
7.5.5. Pay such other reasonable and appropriate expenses, including
third-party direct payment of benefits, losses and claims pursuant to the Plan. The Plan
Administrator may act in reasonable reliance on the actions of one or more third-party
administrator(s) under contract with the County to provide plan administration fees, as
may be necessary in connection with the administration of the Benefits Trustservices.
7.6. Subject to the limitations set forth in schedule A, the Administrator
may prosecute in the name of the County, defend, or 5.2.2 Overseeing and managing
the prosecution, defense, and compromise of actions, claims, orand proceedings for the
protection of the assets of the Benefits Trust Fund and the exercise of the powers
vested in the Administrator under this Declaration of Benefits Trust, and making related
recommendations to the Trustees and the Board, as needed. The Plan Administrator
may, after consulting with the Trustees, direct prosecution of actions in the name of the
County for reimbursement of the cost of medical care and treatment paid under the
Plan, including, but not limited to, actions for recovery of the cost of medical care and
treatment pursuant to A.R.S. § 12-962 and other applicable law § 12-962 and other
applicable law. The Plan Administrator shall have the authority to compromise
demands or claims for recovery under the Plan of all subrogation, restitution, salvage
and related claims, including reimbursement of the cost of medical care and treatment,
when the settlement amount is up to $100,000 less than the amount that the County or
its authorized agent has demanded in reimbursement.
Article 8. 5.3 Finance Manager. The County’s Benefits Finance Manager
(“Finance Manager”) shall be licensed pursuant to Title 20, Chapter 2, Article 3 or 9, of
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the Arizona Revised Statutes, and the County Manager shall verify such licensure. The
Finance Manager is delegated responsibility for:
5.3.1 Overseeing and managing all payments and disbursements made
by the Benefits Trust, including, but not limited to, those made to third party
administrators.
5.3.2 Providing written reports to the Trustees each quarter showing the
financial position of the Benefits Trust, including receipts and expenditures for the
quarter. The Finance Manager shall cooperate with the County’s external auditor on the
performance of the annual audit of the Benefits Trust, and present the external auditor’s
annual audit report to the Trustees in a duly noticed meeting.
5.3.3 Reviewing and presenting to the Trustees no less frequently than
annually, recommendations by the County’s appointed actuary on adequate and
appropriate reserve amounts for the Plan based on generally-accepted actuarial
methods.
5.3.4 Making recommendations to the Trustees and the Board, as
needed or requested, on an adequate and appropriate provision for stop-loss insurance
for self-insured liability, contingent on maintaining recommended Benefit Trust reserves.
5.3.5 Presenting to the Trustees for review and input prior to approval by
the Board, the total recommended premiums needed to support the Plan and any Plan
design changes having a financial impact on Plan premiums. In determining
recommended total premiums, the Finance Manager shall consult with licensed
actuaries familiar with the Benefits Trust and the Plan, and consider all reasonable
factors, including the amount of reserves in the Benefits Trust, the claims experience of
the Plan and the Benefits Trust, market conditions, and cost trends.
5.3.6 Making recommendations to the Trustees and the Board, as
needed or requested, on premium holidays, subsidies, and/or refunds, which must not
reduce the Benefits Trust reserves below the recommended level without a sound
contingency to cover any shortfall in the Benefits Trust.
5.3.7 Submitting claims in class actions filed on behalf of self-insured
health care or disability plans similarly situated to the Plan when, in his or her best
judgment and after consulting with legal counsel of record, the Finance Manager
determines there are sufficient and meritorious grounds. The Finance Manager shall
have the authority to accept settlements of such submitted claims up to $100,000,
where the class action reaches a settlement approved by a court of law.
5.3.8 Making recommendations to the Board concerning the engagement
of the County’s actuaries and external auditors.
ARTICLE 6: Contributions to and Distributions from the Benefits Trust
6.1 Contributions. Contributions to the Benefits Trust shall be as follows:
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6.1.1 Funding. The Benefits Trust may be funded by any one or more of
the following sources and as otherwise authorized by the Board: allocation of funds
from general fund and non-general fund departments of the County and special taxing
districts, employee contributions, gifts, grants, by an special taxes levied to satisfy
judgments, payment of claims or other involuntary indebtedness and by monies
recovered from litigation, liens, recovery from insurers, subrogation, salvage value of
damaged property, interest, dividends, rebates, forfeitures, refunds, credits,
reimbursements, and recovery from third parties. The County shall deposit all monies
received for the purposes of funding the Health and Welfare Benefits Program,
including, but not limited to, contributions collected from Participants through payroll
deductions and County contributions, into the Benefits Trust.
6.1.2 Event of Underfunding. In the event the available financial
resources of the Benefits Trust prove inadequate to meet the obligations of the Benefits
Trust, the Board shall take action to cure the deficiency with either or both interim or
permanent transfers from the County’s general fund or other non-general funds
sufficient to meet the Benefit Trust’s obligations.
6.2 Distributions. Distributions from the Benefits Trust shall be made for the
following reasons and as otherwise authorized by the Board; provided, however, there
shall be no expenditure for any purpose not specified in A.R.S. § 11-981:
6.2.1 Benefits. Paying for or providing benefits to Participants in
accordance with the terms, provisions, and conditions of the Plan, and paying for
premiums of group-insured programs pursuant to the Health and Welfare Benefits
Program.
6.2.2 Expenses. Paying, either directly or by reimbursement, all
reasonable expenses of operating, administering, and managing the Plan, the Health
and Welfare Benefits Program, and the Benefits Trust, including, but not limited to:
6.2.2.1 Where third parties are engaged to provide services to the
Plan, the Health and Welfare Benefits Program, or the Benefits Trust, compensating
such third parties;
6.2.2.2 Where employees of the County render services to the
Plan or Benefits Trust, compensating the County for such services; and
6.2.2.3 Where taxes or assessments are levied or imposed upon
the Plan or Benefits Trust, paying such taxes or assessments.
6.2.3 Return of Mistaken Contribution. Returning a contribution made by
the County or a Participant as the result of a mistake, provided that the repayment is not
prohibited by law.
6.2.4 Upon Termination. Upon termination of the Benefits Trust, after all
obligations of the Benefits Trust have been satisfied, any remaining Funds shall be
transferred in accordance with Article 9 below.
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ARTICLE 7: Settlement Authority
The Board must approve all settlements of actions, claims, or proceedings for the
protection of the assets of the Benefits Trust, including claims for reimbursement of the
cost of medical care and treatment, that are not within the authority granted to the Plan
Administrator, Finance Manager or Trustees as set forth above.
ARTICLE 8: Statutory Requirements
8.1 Stop-Loss Insurance and Indemnification.
8.1. Stop-Loss Insurance. For each County. For self-insured liability covered by
this Benefits Trust, the Trustees shall review and recommend adjustments to the stop -
loss terms and amount shall be determined by the Administrator and approved by, as
necessary, to assure that the Board annually. terms and amount are adequate and
appropriate.
8.2. Non-Liability and Indemnification of Trustees and Administrator.
8.2.1. Non-Liability. Except as otherwise provided by law, the
Administrator and Trustees shall not be liable individually for any act or omission of the
Administrator, any Trustee, agent, or representative Auditor. The County shall
engage an independent external auditor to perform an annual audit of the Benefits
Trust, nor. Each audit report shall the Administrator or any Trustee be liable individually
for negligence, error in judgment, or any act or omission, except as set forth below.
8.2.1.1. Trustees. Every act or thing done or omitted, and any power exercised
or obligation incurred by the Trustees, or any of them, in the administration of the
Benefits Trust, or in connectionbe kept on file for no less than five (5) years with any
business or property of the Benefits Trust, in their Trustee capacity, shall be deemed to
be done, omitted, exercised, or incurred by the Trustees, as Trustees and not as
individuals. Upon any debt, claim, demand, judgment, decree, or obligation of any
nature whatsoever against or incurred by the Trustees in their capacity as Trustees,
whether founded upon contract or tort, recourse shall be solely to the property of the
Benefits Trustthe Clerk of the Board.
8.2.1.2. Administrator. Every act or thing done or omitted, and any
power exercised or obligation incurred by the Administrator in the administration of the
Benefits Trust, or in connection with any business or property of the Benefits Trust, in
his or her capacity as Administrator, shall be deemed to be done, omitted, exercised, or
incurred by the Administrator acting under the powers and duties of the Administrator
under the provisions of this Declaration of Benefits Trust. Upon any debt, claim,
demand, judgment, decree, or obligation of any nature whatsoever against or incurred
19

by the Administrator in his or capacity as such, whether founded upon contract or tort,
recourse shall be solely to the property of the Benefits Trust.
8.2.1.3. Exclusion. Nothing contained in this Benefits Trust shall
protect the Administrator, a Trustee, agent or representative of the Benefits Trust
against liability to the Benefits Trust, or to the beneficiaries thereof, for gross
negligence, bad faith, and/or willful or wanton misconduct in the conduct of his or her
duties.
8.2.2. Indemnification. The Benefits Trust shall indemnify, defend, and
hold harmless each Trustee and the Administrator from and against all claims and
liabilities, whether they proceed to judgment or are settled, to which such Trustee or
Administrator may become subject, by reason of his or her being or having been a
Trustee or Administrator, or by reason of any action alleged to have been taken or
omitted by him or her, as Trustee or Administrator.
8.2.2.1. Reimbursement of Expenses. The Benefits Trust shall
reimburse the Trustee or Administrator for all legal and other expenses that the Trustee
or Administrator reasonably incurred in connection with any such claim or liability.
8.2.2.2. Exclusion. No Trustee or Administrator shall be
indemnified or reimbursed under the foregoing provisions in relation to any matter, if the
Trustee’s or Administrator’s action or omission constituted bad faith, gross negligence,
and/or willful and wanton misconduct in the conduct of the Trustee’s or Administrator’s
duties. This exclusion applies if a court of competent jurisdiction has ruled that the
Trustee or Administrator acted in bad faith, with gross negligence, and/or willful and
wanton misconduct. In the absence of such a ruling, this exclusion applies if the
Benefits Trust shall have received a written opinion from an attorney representing the
County to the effect that if the matter of bad faith, gross negligence, and/or willful and
wanton misconduct in the conduct of duties had been adjudicated, it would have been
adjudicated against such Trustee or Administrator.
8.2.2.3. Non-Exclusivity. The rights accruing to a Trustee or
Administrator under these provisions shall not exclude any other right to which the
Trustee or Administrator may lawfully be entitled, nor shall this provision restrict the right
of the Benefits Trust to indemnify or reimburse such Trustee or Administrator in any
proper case, even though not specifically provided for herein; provided that no Trustee
or Administrator may satisfy any right of indemnity or reimbursement granted herein, or
to which he or she may be otherwise entitled, except as provided by law.
Article 9.8.3 Risk Management Consultant or Insurance Administrator. The
County shall designate a risk management consultant or insurance administrator
licensed pursuant to Title 20, Chapter 2, Article 3 or 9, of the Arizona Revised Statutes.
The Board or its duly authorized designee shall verify such licensure.
ARTICLE 9: Dissolution and Termination
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In accordance with A.R.S. § 11-981, if the CountyBoard determines that it will no longer
provide the Health a self-insured health and Welfare Benefits Programwelfare benefits
program, any other fully self-insured or direct-pay health care plan for Participants, or a
trust is no longer required by law for such plans, the CountyBoard may dissolve the
Benefits Trust Fund and terminate this Declaration of Benefits Trust after payment of all
valid outstanding liabilities orand obligations. Upon notice of such dissolution and
termination, the Board of Trustees shall cause any remaining funds in the Benefits Trust
Fund to be transferred to the County for deposit in its general fund.
ArticleARTICLE 10.: Miscellaneous
10.1 Reservation of Authority. Nothing contained in this Declaration of Benefits
Trust shall modify or restrict the legal authority of the Board to amend or terminate the
Plan or to administer and operate appropriate insurance programs for the County.
10.1. 2 Disclaimer of Third Party Beneficiaries. Nothing in this
Declaration of Benefits Trust is intended to confer the status of third-party beneficiary on
any person or entity.
10.2. 3 Waiver. No waiver of any of the provisions of this Declaration of
Benefits Trust by the Board of Trustees or the County shall constitute a waiver of any
other provision, whether or not similar, nor shall any waiver be a continuing waiver. No
waiver by the Board of Trustees or the County of any provision of this Declaration of
Benefits Trust shall be binding unless executed in writing by the Trustees or the County,
as appropriate.
10.3. Further Assurances. The Board of Trustees and the County agree in good
faith to execute such further or additional documents as may be necessary or
appropriate to fully carry out the intent and purpose of this Declaration of Benefits Trust.
10.4. Amendments. The Board of Trustees and the County may amend this
Declaration of Benefits Trust at any time; provided that, such amendment must be in
writing and otherwise comply with applicable law.
10.5. Counterparts. This Declaration of Benefits Trust may be executed in
several counterparts, all of which together shall be considered an originalamended or
modified only by the Board, with notice to and in consultation with the Trustees. The
Trustees may recommend amendments to the Board.
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10.5 Complete Agreement. This Declaration of Benefits Trust, including
any schedules or exhibits attached hereto, constitutes the entire Declaration of Benefits
Trust and supersedes all other understandings, oral or written, related to the
governance of the Benefits Trust.
10.6. Governing Law. and Conflicts. This Declaration of Benefits Trust shall beis
governed by and shall be construed in accordance with the laws of the State of Arizona.
10.7. Conflicts. In the event of a conflict among the terms If any term or
provision of this Declaration of Benefits Trust and A.R.S. § 11-981conflicts with or
violates state law, the statutelaw shall control.
APPROVED and ACCEPTED by:
Signature Pages to Follow
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The County hereby approves and accepts the foregoing Revised and Restated
Declaration of Trust for Maricopa County, Arizona Self-Insured Benefits Trust Fund
effective ____________, 2016 and agrees to be bound by its provisions.
MARICOPA COUNTY, STATE OF ARIZONA
By _________________________________
By _____________________________ _________
Chairman, Board of Supervisors Date
ATTEST:
________________________________
ATTESTED TO:
________________________________ _________
Clerk of the Board Date
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LEGAL COUNSEL DETERMINATION
Counsel has reviewed this
APPROVED AS TO FORM:
________________________________ _________
Deputy County Attorney Date
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The undersigned Trustees hereby accept the trusteeship under the foregoing Revised
and Restated Declaration of Benefits Trust and has determined that it is in proper form
and is within the powers, authority, and discretion granted to the County and the Board
of Supervisors under the laws of the State offor Maricopa County, Arizona.
DATED this ___ day of _______________, 2011.
_____________________________________
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SCHEDULE A
Settlement Authority
1. Administrator. With express authorization from the Board of Supervisors, the
Administrator may prosecute actions for reimbursement of the cost of medical care and
treatment. The Board delegates to the Administrator the authority to compromise
demands or claims for reimbursement of the cost of medical care and treatment when
the settlement amount is up to $50,000 less than the amount that the County has
demanded in reimbursement.
2. Board of Trustees.
A. Compromise of Claims Against the County. The Board of Supervisors
delegates to the Trustees the authority to compromise actions, claims or proceedings
against the County for the protection of the assets of the Self-Insured Benefits Trust
Fund. The Trustees shall have settlement authority up to $100,000 effective
____________, 2016 and agree to be bound by its provisions.
B. Reimbursement Claims. The Board delegates to the Trustees the
authority to compromise demands or claims for reimbursement of the cost of medical
care and treatment when the settlement amount is between $50,001 and $100,000 less
than the amount that the County has demanded in reimbursement.
3. Board of Supervisors. The Board of Supervisors must approve all settlements of
actions, claims or proceedings for the protection of the assets of the Benefits Trust
Fund, including claims for reimbursement of the cost of medical care and treatment, that
are not within the authority granted to the Administrator and the Trustees above.
Jim Steinkamp
________________________________ _________
Trustee, Chairperson Date
Brad Arnett
________________________________ _________
Trustee Date
Beverly Dupree
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________________________________ _________
Trustee Date
Rex Jorgensen
________________________________ _________
Trustee Date
Helena Whitney
________________________________ _________
Trustee Date
27