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r BOOK 99 , PAGE 311 8) Article 3.5 - Overpayments "The Administrator shall notify the Employer whenever attempted recovery is unsuccessful and the Administrator shall not be required to institute any legal proceeding to recover such overpayment." 9) Article 3.8 - Claims Payments Outside the State of Florida Mr. Chalmers wanted the Board to understand that under BCBSF the County does not have the same freedom of movement that they would have with, say, the Prudential Insurance Company. 10) Articles 4.4 and 4.5 set out many of the County's responsibilities, but not those of BCBSF. 11) Articles 6.6 - Inconsistencies repeats that the provisions of this agreement would prevail. 12) Article 2.3 - Financial Obligations "Additionally, the Employer shall maintain a reserve amount with the Administrator or its designee bank as set forth in Exhibit B (Financial Arrangements Banking Arrangement) Item 111.C. Reserve Requirement: $62,000". Mr. Chalmers raised this question of a County official and was told that the reserve in this contract would be 25% of expected claims. Mr. Chalmers believed that to be a very minimal figure. He felt the County would be much more secure with 35% of expected claims and 25% of expected premiums. He cautioned that in the industry this is called "low balling" and any major claims will break the plan at any given point. An expected level of claims must be built in and that should have been designated in the rfp, but it was not. Mr. Chalmers urged the Board to review the contract that is in front of them this morning before authorizing the Chairman's execution. He recommended that the Board not sign the proposed contract. OMB Director Joe Baird pointed out that in the banking arrangement Mr. Chalmers referred to, the County asked that only a small amount be set aside ($62,000) because we didn't want the company to be holding all our money. We have more in reserves than that. The $62,000 is the amount we will transfer into the account to pay for 4 days of claims. We tried to negotiate that figure down because we do not get good interest earnings from that money. That is just the banking arrangement. We do have a 25% cushion set aside in our trust fund at present. That $62,000 is just what we will transfer into the bank account to open it up. Director Baker advised that he went over this many times and with Director Baird, Attorney Vitunac and other carriers, and he is confident this contract is an excellent plan. He is confident that we will see savings over the next year that we have not seen in some time. He also -is confident that we will have the 68 OCTOBER 1, 1996