HomeMy WebLinkAboutItem 22 - Agreement for Affordable Care Act Compliance Services Human Resources Department
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Item # 22
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
November 19, 2024
TOPIC: Affordable Care Act Compliance Services
AGENDA TITLE
Agreement with Sterling Health Services, Inc. for Affordable Care Act Compliance
Services in an Amount Not to Exceed $50,000 (Non-General Fund)
RECOMMENDED ACTION
Authorize the City Manager to execute an agreement with Sterling Health Services, Inc.
to provide Affordable Care Act compliance services for three years, effective November
19, 2024 through October 31, 2027, with provisions for two optional one-year
extensions, not to exceed $10,000 per year (Agreement No. A-2024-XXX).
GOVERNMENT CODE §84308 APPLIES: Yes
DISCUSSION
The City maintains continued need for ongoing compliance with the Federal Patient
Protection and Affordable Care Act (ACA). This agreement will provide the Human
Resources Department with the necessary resources to efficiently meet the annual
reporting requirement.
The ACA compliance service includes evaluating the City’s employee population for
determining eligibility for mandated minimum essential coverage, electronically filing of
Forms 1094-C and 1095-C with the Internal Revenue Service (IRS) information about
the health care coverage offered to eligible employees, and printing and mailing of
annual Federal Form 1095-C to eligible employees. Failure to meet this compliance
requirement can result in penalties for the City.
Keenan, the City’s Benefits Broker, conducted a blind solicitation for proposals and
received four vendor responses. The City selected Sterling Health Services based on
its lowest responsible bid. The proposed agreement stipulates an annual fee of $3,000
and additional services of printing and mailing IRS forms at a cost per mailing. Total
annual costs for the services will not exceed $10,000 per year.
Although this agreement falls within the City Manager's authority of $50,000, the City
already has an existing contract with the vendor for other services. As a result, this
Affordable Care Act Compliance Services
November 19, 2024
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new contract would exceed the City Manager’s authority for this vendor and thus
requires City Council approval.
ENVIRONMENTAL IMPACT
There is no environmental impact associated with this action.
FISCAL IMPACT
Funding for the Affordable Care Act compliance services is available in the Employee
Group Insurance, Contract Services-Professional expenditure account (no.
08109053-62300) for FY 2024-25, and funding for subsequent fiscal years will be
included in the proposed budgets for City Council consideration.
Fiscal Year Accounting
Unit –
Account No.
Fund, Account
Description
Amount
2024-25 08109053-
62300
Employee Group
Insurance, Contract
Services-Professional
$10,000.00
2025-26 08109053-
62300
Employee Group
Insurance, Contract
Services-Professional
$10,000.00
2026-27 08109053-
62300
Employee Group
Insurance, Contract
Services-Professional
$10,000.00
2027-28 08109053-
62300
Employee Group
Insurance, Contract
Services-Professional
$10,000.00
2028-29 08109053-
62300
Employee Group
Insurance, Contract
Services-Professional
$10,000.00
Total $50,000.00
EXHIBIT(S)
1.Agreement with Sterling Health Services, Inc.
Submitted By: Lori Schnaider, Executive Director of Human Resources
Approved By: Alvaro Nuñez, City Manager
AGREEMENT BETWEEN THE CITY OF SANTA ANA AND
STERLING HEALTH SERVICES FOR AFFORABLE CARE ACT COMPLIANCE
THIS AGREEMENT is hereby made and entered into this 19th day of November, 2024,
by and between the City of Santa Ana, a charter city and municipal corporation organized
and existing under the Constitution and laws of the State of California ("City"), and Sterling
Health Services, Inc. a California Corporation doing business as Sterling Administration
(“Consultant”).
RECITALS
A. The City desires to retain Consultant to assist City in maintaining compliance with
the Patient Protection and Affordable Care Act (“ACA”) {42 U.S.C. Sections 18001
et seq.)
B. In undertaking the performance of this Agreement, Consultant represents that it is
knowledgeable in its field and that any services performed by Consultant under
this Agreement will be performed in compliance with such standards as may
reasonably be expected from a professional consulting firm in the field.
NOW THEREFORE, in consideration of the mutual and respective promises, and subject
to the terms and conditions hereinafter set forth, the parties agree as follows:
1. SCOPE OF SERVICES
A. Consultant shall provide services necessary to assist City in maintaining
compliance with the ACA, including but not limited to, capturing all employees
including full time, part time, variable hour employees, and multi-employer and/or
union employees, generation of 1094 and 1095 forms on behalf of the City
including the potential for printing and mailing the forms on behalf of the City, IRS
fulfillment status, aid in resolving 226-J letter/fme issues that may develop, and
providing the ability to talk with an ACA compliance specialist during normal
business hours.
B. City shall provide information necessary to prepare 1094 and 1095 forms on behalf
of City no later than January 8th of every year. Consultant will then distribute ACA
forms to City for distribution or at City’s election, mail forms to City employees no
later than January 31st. Consultant will e-file 1094 and/or 1095 forms on behalf of
the City with the IRS, no later than March 31st.
2. COMPENSATION
A. City agrees to pay, and Consultant agrees to accept as total payment for its
services a flat yearly fee of $3,000. Optional services of printing and mailing IRS
forms 1094 and 1095 are available at a cost of $3.75 per mailing. The total sum
authorized under this Agreement shall not exceed fifty thousand dollars ($50,000)
for the entire term of this Agreement.
B. Consultant will invoice City on a quarterly basis. Payment will be made within sixty
(60) days of the date of the invoice.
3. TERM
The term of this Agreement shall commence on November 19, 2024 and will terminate
on October 31, 2027, with two optional one-year extensions exercisable by the City with
the agreement of Consultant unless terminated earlier in accordance with the terms
herein.
4. INDEPENDENT CONTRACTOR
Consultant shall, during the entire term of this Agreement, be construed to be an
independent contractor and not an employee of the City. This Agreement is not
intended nor shall it be construed to create an employer-employee relationship, a joint
venture relationship, or to allow the City to exercise discretion or control over the
professional manner in which Consultant performs the services which are the subject
matter of this Agreement; however, the services to be provided by Consultant shall be
provided in a manner consistent with all applicable standards and regulations governing
such services. Consultant shall pay all salaries and wages, employer’s social security
taxes, unemployment insurance and similar taxes relating to its employees and shall be
responsible for all applicable withholding taxes.
5. INSURANCE
A. Consultant shall procure and maintain for the duration of the Agreement
insurance against claims for security breaches, system failures, injuries to
persons, damages to software, and damages to property (including computer
equipment), theft, or other misuse of City’s data, infringement of intellectual
property, invasion of privacy and breach of data, which may arise from or in
connection with the performance of the work hereunder by Consultant, its agents,
representatives, or employees. Coverage shall be at least as broad as:
1) Commercial General Liability (CGL): Insurance Services Office Form
CG 00 01 covering CGL on an “occurrence” basis, including products and
completed operations, property damage, bodily injury and personal &
advertising injury with limits no less than $1,000,000 per occurrence and
$2,000,000 general aggregate.
2) Technology Professional Liability Errors and Omissions Insurance
(E&O): appropriate to the Consultant’s profession and work hereunder,
with limits not less than $2,000,000 per occurrence and $2,000,000
aggregate. Coverage shall be sufficiently broad to respond to the duties
and obligations as is undertaken by the Consultant in this agreement.
3) Workers’ Compensation (W/C): as required by the State of California,
with statutory limits, and Employer’s Liability insurance with limits of no
less than $1,000,000 per accident, policy, employee, for bodily injury or
disease.
B. If Consultant maintains broader coverage and/or higher limits than the minimums
shown above for any line of coverage, City requires and shall be entitled to the
broader coverage and/or the higher limits maintained by Consultant. Any
available insurance proceeds in excess of the specified minimum limits of
insurance and coverage shall be available to City. The above required insurance
policies (set forth in subsection A) are to contain or be endorsed to contain the
following provisions:
1) City of Santa Ana, its City Council, its officers, officials, employees,
agents, and volunteers are to be covered as additional insureds,
under Consultant’s CGL, and E&O policies, with respect to any
liability arising out of work or operations performed by or on behalf
of the Consultant including materials, parts, equipment, and
personnel furnished in connection with such work or operations.
2) Consultant’s Insurance companies agree to waive all rights of
subrogation against City of Santa Ana, its City Council, its officers,
officials, employees, agents, and volunteers for losses paid under
the terms of any policy which arise from work performed by
Consultant under this Agreement.
3) For any claims related to this contract, Consultant’s insurance
coverage shall be primary and any insurance maintained by City of
Santa Ana, its City Council, its officers, officials, employees,
agents, or volunteers shall not contribute with it.
4) A severability of interest provision must apply for all the additional
insureds, ensuring that Consultant’s insurance shall apply
separately to each insured against whom a claim is made or suit is
brought, except with respect to the insurer’s limits of liability.
5) Insurance policies required herein shall provide that coverage shall
not be canceled, suspended, voided, reduced in coverage or in
limits, non-renewed by the carrier, or materially changed except
after thirty (30) days prior written notice has been given to City. Ten
(10) days prior written notice shall be provided to City for policy
cancellation or non-renewal due to non-payment of premium.
C. Certificate Holder on each Evidence of Insurance certificate shall be: City of
Santa Ana, Attention: Human Resources Agency, 20 Civic Center Plaza M-24,
Santa Ana, CA 92701. The name and location of project must be included in the
Description of Operations section of each certificate.
D. Self-insured retentions must be declared to and approved by City. City may
require Consultant to provide proof of ability to pay losses and related
investigations, claim administration, and defense expenses within the retention.
E. Insurance is to be placed with insurers authorized to conduct business in the
state of California with a current A.M. Best rating of no less than A-:VII, unless
otherwise acceptable to City.
F. Claims Made Policies: If any of the required policies provide coverage on a
claims-made basis:
1) The retroactive date must be shown and must be before the date of
the contract.
2) Insurance must be maintained and evidence of insurance must be
provided for at least three (3) years after completion of work.
3) If coverage is canceled or non-renewed, and not replaced with
another claims-made policy form with a retroactive date prior to the
contract effective date, Consultant must purchase “extended
reporting” coverage for a minimum of three (3) years after
completion of work.
G. Verification of Coverage: Consultant shall furnish City with original Certificates
of Insurance including all required amendatory endorsements (or copies of the
applicable policy language effecting coverage required by this clause). Failure to
obtain the required documents prior to the work beginning shall not waive
Consultant’s obligation to provide them. City reserves the right to require
complete, certified copies of all required insurance policies, including
endorsements required by these specifications, at any time.
H. Subcontractors- City shall require and verify that all subcontractors maintain
insurance meeting all the requirements stated herein.
I. Special Risks or Circumstances- City reserves the right to modify these
requirements, including limits, based on the nature of the risk, prior experience,
insurer, coverage, or other special circumstances.
6. INDEMNIFICATION
Consultant agrees to defend, and shall indemnify and hold harmless the City, its
officers, agents, employees, contractors, special counsel, and representatives from
liability: (1) for personal injury, damages, just compensation, restitution, judicial or
equitable relief arising out of claims for personal injury, including death, and claims for
property damage, which may arise from the negligent operations of the Consultant, its
subcontractors, agents, employees, or other persons acting on its behalf which relates
to the services described in section 1 of this Agreement; and (2) from any claim that
personal injury, damages, just compensation, restitution, judicial or equitable relief is
due by reason of the terms of or effects arising from this Agreement. This indemnity and
hold harmless agreement applies to all claims for damages, just compensation,
restitution, judicial or equitable relief suffered, or alleged to have been suffered, by
reason of the events referred to in this Section or by reason of the terms of, or effects,
arising from this Agreement. The Consultant further agrees to indemnify, hold harmless,
and pay all costs for the defense of the City, including fees and costs for special counsel
to be selected by the City, regarding any action by a third party challenging the validity
of this Agreement, or asserting that personal injury, damages, just compensation,
restitution judicial or equitable relief due to personal or property rights arises by reason
of the terms of, or effects arising from this Agreement. City may make all reasonable
decisions with respect to its representation in any legal proceeding. Notwithstanding the
foregoing, to the extent Consultant’s services are subject to Civil Code Section 2782.8,
the above indemnity shall be limited, to the extent required by Civil Code Section
2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness,
or willful misconduct of the Consultant.
7. RECORDS
Consultant shall keep records and invoices in connection with the work to be performed
under this Agreement. Consultant shall maintain complete and accurate records with
respect to the costs incurred under this Agreement and any services, expenditures, and
disbursements charged to the City for a minimum period of three (3) years, or for any
longer period required by law, from the date of final payment to Consultant under this
Agreement. All such records and invoices shall be clearly identifiable. Consultant shall
allow a representative of the City to examine, audit, and make transcripts or copies of
such records and any other documents created pursuant to this Agreement during
regular business hours. Consultant shall allow inspection of all work, data, documents,
proceedings, and activities related to this Agreement for a period of three (3) years from
the date of final payment to Consultant under this Agreement.
8. CONFIDENTIALITY
Due to the nature of the services provided pursuant to this Agreement, Consultant will
be provided information by City that is confidential, including identifying information for
City employees. Consultant will maintain strict confidentiality as required by all
applicable laws. “Confidential Information" shall include all nonpublic information.
Confidential information includes not only written information, but also information
transferred orally, visually, electronically, or by other means. Confidential information
disclosed to either party by any subsidiary and/or agent of the other party is covered by
this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply
to any information that (a) has been disclosed in publicly available sources; (b) is,
through no fault of the Consultant disclosed in a publicly available source; (c) is in
rightful possession of the Consultant and disclosed without an obligation of
confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently
developed by the Consultant without reference to information disclosed by the City.
In the event of a data breach, Consultant will advise City of the breach as soon as
practicable but in no event more than 48 hours after Consultant learns of any data
breach involving any information provided to Consultant pursuant to this Agreement.
Consultant will comply with all applicable laws regarding notice to any person whose
information was provided pursuant to this Agreement whose data has been subject to
any breach.
9. CONFLICT OF INTEREST CLAUSE
Consultant covenants that it presently has no interest and shall not have interests, direct
or indirect, which would conflict in any manner with performance of services specified
under this Agreement.
10. NOTICE
Any notice, tender, demand, delivery, or other communication pursuant to this
Agreement shall be in writing and shall be deemed to be properly given if delivered in
person or mailed by first class or certified mail, postage prepaid, sent by fax or other
telegraphic communication in the manner provided in this Section, to the following
persons:
To City:
City of Santa Ana
City Clerk (M-30)
20 Civic Center Plaza
P.O. Box 1988
Santa Ana, California 92702
With copy to:
Executive Director of Human Resources
City of Santa Ana
20 Civic Center Plaza (M-24)
P.O. Box 1988
Santa Ana, California 92702
Fax (714) 647-6930
And:
City Attorney
City of Santa Ana
20 Civic Center Plaza (M-29)
P.O. Box 1988
Santa Ana, California 92702
Fax (714) 647-6515
To Consultant:
Ms. Cora Tellez
Sterling Health Services Inc.
1000 Broadway #250
Oakland, California 94607
Fax: (877) 517-4729
A party may change its address by giving notice in writing to the other party. Thereafter,
any communication shall be addressed and transmitted to the new address. If sent by
mail, communication shall be effective or deemed to have been given three (3) days
after it has been deposited in the United States mail, duly registered or certified, with
postage prepaid, and addressed as set forth above. If sent by facsimile, communication
shall be effective or deemed to have been given twenty-four (24) hours after the time
set forth on the transmission report issued by the transmitting facsimile machine,
addressed as set forth above. For purposes of calculating these time frames,
weekends, federal, state. County or City holidays shall be excluded.
11. EXCLUSIVITY AND AMENDMENT
This Agreement represents the complete and exclusive statement between the City and
Consultant regarding the subject matter herein, and supersedes any and all other
agreements, oral or written, between the parties. In the event of a conflict between the
terms of this Agreement and any attachments hereto, the terms of this Agreement shall
prevail and will serve to fully supersede existing Agreement. This Agreement may not
be modified except by written instrument signed by the City and by an authorized
representative of Consultant. The parties agree that any terms or conditions of any
purchase order or other instrument that are inconsistent with, or in addition to, that
terms or conditions hereof, shall not bind or obligate Consultant nor the City. Each party
to this Agreement acknowledges that no representations, inducements, promises or
agreements, orally or otherwise, have been made by any party, or anyone acting on
behalf of any parties, which are not embodied herein.
12. ASSIGNMENT
Inasmuch as this Agreement is intended to secure the specialized services of
Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest
herein without the prior written consent of the City and any such assignment, transfer,
delegation or subcontract without the City’s prior written consent shall be considered
null and void. Nothing in this Agreement shall be construed to limit the City’s ability to
have any of the services that are the subject to this Agreement performed by City
personnel or by other Consultants retained by City.
13. TERMINATION
This Agreement may be terminated by the City with thirty (30) days written notice of
termination to the Consultant.
A. As a condition of such payment, the City may require Consultant to deliver
to the City all the work product completed, as of such date, and in such
case, such work product shall be the property of the City unless prohibited
by law, and Consultant consents to the City’s use thereof for such
purposes, as the City deems appropriate.
B. Payment need not be made for work that fails to meet the standard of
performance specified in the Recitals of this Agreement.
14. NON-DISCRIMINATION
Consultant shall not discriminate because of race, color, creed, relation, sex, marital
status, sexual orientation, gender identity, age, na tional origin, ancestry, or disability, as
defined and prohibited by applicable law, in the recruitment, selection, training,
utilization, promotion, termination or other employment related activities or any activities
under this Agreement.
Consultant affirms that it is an equal opportunity employer and shall comply with all
applicable federal, state and local laws and regulations.
15. JURISDICTION - VENUE
This Agreement has been executed and delivered in the State of California and the
validity, interpretation, performance, and enforcement of any of the clauses of this
Agreement shall be determined and governed by the laws of the State of California.
Both parties further agree that Orange County, California, shall be the venue for any
action or proceeding that may be brought or arise out of, in connection with or by reason
of this Agreement.
16. PROFESSIONAL LICENSES
Consultant shall, throughout the term of this Agreement, maintain all necessary
licenses, permits, approvals, waivers, and exemptions n ecessary for the provision of the
services hereunder and required by the laws and regulations of the United Sates, the
State of California, the City of Santa Ana and all other governmental agencies.
Consultant shall notify the City immediately and in writing of its inability to obtain or
maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall
be cause for termination of this Agreement.
17. COMPLIANCE WITH ALL LAWS
Consultant agrees to comply with all applicable federal, state and local laws and
regulations including but not limited to, the California Consumer Privacy Act (California
Business and Professions Code Section 1798.100 et seq.)
18. MISCELLANEOUS PROVISIONS
A. Each undersigned represents and warrants that its signature herein below
has the power, authority and right to bind their respective parties to each
of the terms of this Agreement, and shall indemnify City fully, including
reasonable costs and attorney’s fees, for any injuries or damages to City
in the event that such authority or power is not, in fact, held by the
signatory or is withdrawn.
B. All exhibits referenced herein and attached hereto shall be incorporated as
if fully set forth in the body of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date
and year first above written.
ATTEST: CITY OF SANTA ANA
________________________ _________________________
Jennifer L. Hall Alvaro Nuñez
City Clerk City Manager
APPROVED AS TO FORM:
Sonia R. Carvalho
City Attorney
__________________________
By: Laura A. Rossini
Chief Assistant City Attorney
RECOMMENDED FOR APPROVAL STERLING HEALTH SERVICES, INC.
____________________________ __________________________
Lori Schnaider Sarah Soman
Executive Director of Human Resources Director of Operations
Sarah Soman