EXHIBIT 10.1 HEALTH INSURANCE CONTRACT NO. 03-016G FOR THE METRO-NORTH HEALTH REGION BETWEEN PUERTO RICO HEALTH INSURANCE ADMINISTRATION AND TRIPLE S, INC.

 

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                                                                    EXHIBIT 10.1

 

                            HEALTH INSURANCE CONTRACT

                               NO. 03-016G FOR THE

                            METRO-NORTH HEALTH REGION

                                     BETWEEN

                   PUERTO RICO HEALTH INSURANCE ADMINISTRATION

                                       AND

                                 TRIPLE S, INC.

 

This Amendment entered into this 1st DAY OF JULY, 2005, at San Juan, Puerto

Rico, by and between PUERTO RICO HEALTH INSURANCE ADMINISTRATION, a public

instrumentality of the Commonwealth of Puerto Rico, organized under Law 72

approved on September 7, 1993, hereinafter referred to as the "ADMINISTRATION",

represented by its Executive Director, Nancy Vega Ramos and TRIPLE S, INC. a

domestic corporation duly organized and doing business under the laws of the

Commonwealth of Puerto Rico, with employer social security number 660-22-9064,

hereinafter referred to as the "INSURER" represented by its Chief Executive

Director, SOCORRO RIVAS.

 

                                   WITNESSETH

 

In consideration of the mutual covenants and agreements hereinafter set forth,

the parties, their personal representatives and successors, agree as follows:

 

WHEREAS: On June 13th, 2002, the ADMINISTRATION and INSURER entered into

Contract No. 03-016 for the Metro North Health Region, a three-year contract

with an effective date of July 1st, 2002 (the "Contract") subject to annual

renegotiations of the premiums. Said contract provides health insurance coverage

to all enrollees in and within the METRO-NORTH HEALTH AREA/REGION, composed of

the municipalities of BAYAMON, CATANO, COMERIO, COROZAL, DORADO, GUAYNABO,

NARANJITO, TOA ALTA, TOA BAJA AND VEGA ALTA.

 

WHEREAS: Pursuant to an executive decision of the Governor of Puerto Rico,

Anibal Acevedo Vila, the Health Reform Program Plan is presently undergoing a

profound assessment that is being conducted by the designated EVALUATING

COMMISSION FOR THE HEALTH REFORM PROGRAM PLAN, in order to reevaluate

significant conceptual, organizational and operational changes in the government

health infrastructure and service delivery system in place.

 

WHEREAS: In view that the Commission's final report with the resulting findings

and recommendations to be implemented in the Health Reform Program Plan, will

not be final until August 2005, the ADMINISTRATION'S Board of Directors with the

Governor's approval has determined to extend the present contract term for an

additional one (1) year period.

 

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WHEREAS: Considering that the contract termination date is due on June 30th,

2005 and pursuant to the terms of Article XXXVIII, the ADMINISTRATION hereby in

the best interest of the Commonwealth of Puerto Rico and the beneficiaries it

serves, has agreed with the INSURER to amend the contract only with respect to

the following Articles as provided herein.

 

HENCEFORTH: The Contract is hereby amended to read as follows:

 

                                    ARTICLE I

                                   DEFINITIONS

 

CONTRACT TERM: The contract term is for (4) four consecutives twelve months

periods after its effective date July 1st, 2002 until June 30, 2006.

Notwithstanding the aforesaid, the contract may be terminated at the

ADMINISTRATION's option, on December 31, 2005 with not less than (60) sixty days

prior notification to Insurer.

 

                                   ARTICLE XVI

                             FINANCIAL REQUIREMENTS

 

ARTICLE XVI, PARAGRAPH (6) IS AMENDED AND SUBSTITUTED TO READ AS FOLLOWS,

EFFECTIVE, AS OF AUGUST 1, 2005:

 

      6.    The INSURER will be paid a fixed administrative cost fee and profit

            of SEVEN DOLLARS WITH ELEVEN CENTS ($7.11) pmpm included in the

            total premium rate made by the Administration. Further, the

            INSURER's aggregated net earnings (considering all INSURER's Health

            Areas/Regions contracted with the ADMINISTRATION) in excess of 2.5%

            of the total aggregated earned premium in this contract year period

            will be shared with the ADMINISTRATION. The ADMINISTRATION share

            apportionment of the earnings shall be 75% and the INSURER share

            shall be 25%.

 

                                  ARTICLE XVIII

                               PAYMENT OF PREMIUMS

 

IN ARTICLE XVIII, PARAGRAPHS (3) AND (5) ARE AMENDED AND SUBSTITUTED TO READ AS

FOLLOWS:

 

3.    The monthly premiums for the months comprised within the contract term and

      covered by this contract are as follows:

 

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      a)    For all beneficiaries including all those who are sixty-five (65)

            years and older who are Medicare beneficiaries with Part A or Parts

            A and B and those who are sixty-five years and older who are not

            Medicare recipients until July 31, 2005:

 

            1)    PER MEMBER PER MONTH RATE (PMPM) (BENEFICIARY) ESTABLISHED AT

                  SEVENTY THREE DOLLARS WITH EIGHT NINE CENTS ($73.89).

 

      b)    For all beneficiaries including all those who are sixty-five (65)

            years and older who are Medicare beneficiaries with Part A or Parts

            A and B and those who are sixty-five years and older who are not

            Medicare recipients from August 1, 2005 to September 30, 2005:

 

            1)    PER MEMBER PER MONTH RATE (PMPM) (BENEFICIARY) ESTABLISHED AT

                  SEVENTY NINE DOLLARS WITH TWO CENTS ($79.02).

 

      c)    For all beneficiaries including all those who are sixty-five (65)

            years and older who are Medicare beneficiaries with Part A or Parts

            A and B and those who are sixty-five years and older who are not

            Medicare recipients from October 1st 2005 through June 30, 2006.

 

            1)    PER MEMBER PER MONTH RATE (PMPM) (BENEFICIARY) ESTABLISHED AT

                  SEVENTY NINE DOLLARS WITH TWO CENTS ($79.02).

 

5.    The INSURER shall not, at any time, increase the rate agreed in the

      contract nor reduce the benefits agreed to as defined in Addendum I of

      this contract.

 

      Notwithstanding the aforesaid, the INSURER acknowledges that the

      ADMINISTRATION reserves the right to modify any of the contract terms, to

      the extent of reducing the agreed premium rates in order to reduce any

      benefits coverage under Addendum I, in the event the ADMINISTRATION is not

      afforded the necessary and sufficient state or federal funds required to

      subsidized all or part of the health plan's benefits hereby covered.

 

      Further, the aforementioned stipulated rates (established in Article XVIII

      of this amendment) assume all beneficiaries including all those who are

      sixty-five (65) years and older who are Medicare beneficiaries with Part A

      or Part A and B, and those who are sixty-five (65) years and older who are

      not Medicare recipients are enrolled with the INSURER. Should any

      initiative related to the Medicare Modernization Project (as defined

 

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      herein) preclude enrollment of any portion of the Medicare Population with

      the INSURER, said aforementioned rate will be subject to modification.

 

                                   ARTICLE XX

                        EDUCATION AND PREVENTIVE PROGRAM

 

IN ARTICLE XX PARAGRAPHS (1) THROUGH (12) ARE RESTATED, AMENDED AND SUBSTITUTED

TO READ AS FOLLOWS, EFFECTIVE AS OF AUGUST 1, 2005: