Appendix 1 Indirect Compensation Disclaimer.docx

Indirect Compensation Disclaimer

The following full disclaimer is being provided by (Company Name) ("Consultant") at the request of Illinois Department of Central Management Services ("Sponsor").

FULL DISCLAIMER

Neither Consultant nor any owner, officer, principal, Affiliate (see definition of “Affiliate” in Exhibit “A” for the full scope of this term), Subcontractor or designee thereof ("Consultant Party") has received or expects to receive any Direct or Indirect Compensation, from any medical or dental carrier (“Carrier”) or pharmacy benefit manager ("PBM") or any Affiliate or designee thereof, in connection with the provision of services to plan sponsors.

The full disclaimer in the preceding paragraph must be updated annually by executing a new full disclaimer no later than 30 days prior to renewing the consulting services agreement between Consultant and Sponsor for each subsequent contract year.

Should an error or inaccuracy in the disclaimer be identified by Consultant or Sponsor, Consultant agrees to fully explain and rectify such error or inaccuracy within 30 days of its recognition. Further, where there is a mid-year change in Consultant's Indirect Compensation, Consultant shall fully apprise Sponsor of the change in writing within 60 days after knowing of the change. Any error or inaccuracy described above shall be grounds for immediate termination of the consulting services agreement by Sponsor, without penalty to Sponsor.

Sponsor is relying on this full disclaimer as a critical factor in choosing and utilizing a consultant which is fully independent (i.e. fully independent of all PBMs and Carriers, including but not limited to those PBMs and Carriers listed below). Consultant must have no financial or other conflict of interest which may adversely impact Consultant's level of loyalty, transparency and advocacy in protecting Sponsor's best interests in the selection, contracting and monitoring of a PBM or Carrier for the Sponsor medical or prescription drug benefit plan.

Non-Exclusive Sample List of PBMs

Southern Scripts

Non-Exclusive Sample List of Carriers

The following persons represent and warrant that they individually or collectively have full knowledge of _______________'s business operations, financial records and relationships with PBMs and medical Carriers, including the operations, financial records and relationships of _______________'s Affiliates and Subcontractors, and are fully capable and authorized to make the full disclaimer set forth above.

Authorized Representative of _______________ Printed:

Date

Primary Owner or Principal of _______________ Printed:

Printed:

Printed:

Date Exhibit A

DEFINED TERMS FOR

INDIRECT COMPENSATION DISCLAIMER

Contract Year of Indirect Compensation Disclaimer: _____________

The following definitions shall apply to the full disclaimer of Indirect Compensation made by (Company Name) ("Consultant") and its primary owners/principals for the Contract Year inserted above.

Key Definitions "Affiliate" means an entity that directly or indirectly controls, is controlled by or is under common control with, _______________, or is an officer, director, owner, or partner of _______________, including but not limited to parent and subsidiary companies. Affiliate shall also include any other person or entity which is created or recruited with the intent to bypass the intent of the indirect compensation disclosure/disclaimer requirements of Section 202 of the Consolidated Appropriations Act of 2021 (“CAA”) (e.g. a non-Affiliate designee).

"Compensation" means anything of monetary value that has exceeded or is expected to exceed $1,000 in value, except for non-monetary compensation (e.g. trips, sponsorships, endorsements) that have a value of $250 or less in the aggregate.

"Indirect Compensation" means any Compensation paid (or credited) to _______________ or any Affiliate or Subcontractor of _______________, by any party other than Sponsor or Sponsor's benefit plan(s) and received in connection with the provision of medical or pharmacy benefit consulting services to plan sponsors. Indirect Compensation includes, but is not limited to, commissions, overrides, incentive payments, marketing fees, referral fees, finder's fees, retention or persistency bonuses, volume payments and any other remunerations. The name or label of the payment (or credit) does not matter. The payment (or credit) must be disclosed (or fully disclaimed herein) regardless of what it is called, how it is paid or when it is paid, if it is paid in connection with the services agreement between _______________ and Sponsor. Indirect Compensation shall be treated as paid in connection with the services agreement regardless of whether Sponsor or Sponsor's medical or prescription drug benefit plan is included or excluded from the calculation or determination of such compensation on a book of business basis. This treatment is appropriate because a financial conflict of interest exists if _______________ has received or expects to receive material payments from the medical Carrier or PBM industry it is being hired to police.

Indirect Compensation must be disclosed or disclaimed whether it is based on (a) Sponsor's level of medical spend, drug spend, number of medical or pharmacy claims, number of employees, number or covered lives or any other metric with respect to a medical Carrier or PBM, (b) _______________'s "book of business" level of medical spend, drug spend, number of medical or pharmacy claims, number of employees, number of covered lives or any other metric with respect to a medical Carrier or PBM, or (c) any other factor which involves _______________ and a medical Carrier or PBM supporting each other to the detriment of Sponsor and its benefit plan(s). Further, compensation must be disclosed (or disclaimed) whether it is being received in connection with services provided to Sponsor, services provided to other plan sponsors, services provided to a medical Carrier or PBM or the conferring of any other benefit (e.g. referrals of business, silence on Carrier or PBM profit-taking techniques, etc.) upon a Carrier or PBM. For purposes of this disclosure/disclaimer requirement, a service or benefit is deemed to be conferred upon the Carrier or PBM if it is conferred upon any person or entity (a) affiliated with the Carrier or PBM, (b) under the direction or control of the Carrier or PBM, or (c) directing or authorizing the payment of such Indirect Compensation. Any disclosure of Indirect Compensation must include a description of the arrangement between the Carrier or PBM and _______________, an Affiliate or Subcontractor (as applicable), pursuant to which such Indirect Compensation is paid.

"Subcontractor" means any entity with whom _______________ or an Affiliate thereof has entered into a contract for services that _______________ or an Affiliate thereof is otherwise obligated to perform under the services agreement between _______________ and Sponsor.