Termination without penalty

Employer will Timely pay Claim Administrator the Termination Administrative Charge indicated in the Fee Schedule specifications of the most current ASO BPA.

Recorded reference: Page 22

Published rationale. The Employer can leave, but not freely and not without loss. Section 6.1(a) on page 11 allows termination by either party only at the end of a month after the Fee Schedule Period ends, on ninety days notice, so there is no convenience exit during the fee period, and Exhibit 7 Section 9(a) on page 46 ties PBM exhibit termination to the end of a Guarantee Period. Exhibit 2 Section 3.4 on page 22 imposes a Termination Administrative Charge set in the missing ASO BPA, which the Claim Administrator may adjust if enrollment shifted ten percent. Section 9(f) on page 46 voids network discount and minimum Rebate guarantees for the Guarantee Period if the Employer terminates early, and pages 28 and 47 end Rebate Credits at termination. Only fraud, misrepresentation or material breach after cure supports for cause exit, with no regulatory integrity trigger. The model forbids penalties and forfeiture of earned amounts; this text imposes both, so bad.

By either Party at the end of any month after the end of the Fee Schedule Period indicated in the Fee Schedule specifications of the most current ASO BPA with ninety (90) days’ prior written notice to the other party

Recorded reference: Page 11

Published rationale. On Page 11, Section 6.1 permits termination for convenience with 90 days notice, but only after the expiration of the Fee Schedule Period specified in the omitted ASO BPA. Section 3.4 of Exhibit 2 on Page 22 also imposes a Termination Administrative Charge. On Page 46, terminating Exhibit 7 before the end of a guarantee period voids rebate and discount guarantees. The agreement lacks provisions allowing immediate termination without penalty for vendor regulatory integrity failures.

Rebate Credits shall not continue after termination of the prescription drug program.

Recorded reference: Page 28

Published rationale. Page 11 permits ordinary main-agreement termination only after the fee schedule period with notice, while page 46 permits ending the pharmacy exhibit after a guarantee period. Page 22 requires a termination administrative charge under the omitted application and allows repricing of that charge. Page 46 removes applicable network and minimum rebate guarantees for a guarantee period when specified early termination occurs, and page 28 ends rebate credits after program termination. This is not an unrestricted convenience exit without penalty or preservation of earned economic value. The size of the termination charge and guarantee period are unknown because their schedules are missing, but the affirmative charge, timing constraints and forfeiture language support a bad verdict. No independent regulatory integrity termination trigger appears.

By either Party at the end of any month after the end of the Fee Schedule Period indicated in the Fee Schedule specifications of the most current ASO BPA with ninety (90) days’ prior written notice to the other party

Recorded reference: Page 11

Published rationale. Page 11 allows either party to terminate at the end of any month after the fee schedule period, with ninety days written notice. Mutual termination on any date is allowed. Fraud, misrepresentation, or material breach supports termination after the Page 10 cure period. That is a convenience exit, but only after the rate period, not during it. Page 22 requires the Employer to pay a termination administrative charge set in the omitted ASO Benefit Program Application, including for services in the run off period. Page 46 says network discount and minimum rebate guarantees in the addendum are not effective if the pharmacy exhibit ends before the guarantee period. Page 25 says that after final settlement, overpayment refunds are retained by Claim Administrator. There is no termination right for a regulatory integrity event. The model contract requires convenience termination on reasonable notice without penalty, no forfeiture of earned amounts, and a regulatory integrity exit. A post period ninety day exit exists, so the right is not missing. The lock in, the termination charge, and the guarantee forfeiture are material carve outs. That is partial.

Employer will Timely pay Claim Administrator the Termination Administrative Charge indicated in the Fee Schedule specifications of the most current ASO BPA

Recorded reference: Page 22

Published rationale. The model term allows termination for convenience on reasonable notice without penalty, with earned amounts never forfeited. This draft attaches a price to exit at every step. Convenience termination is only available at the end of a month after the Fee Schedule Period ends, on 90 days notice, per section 6.1(a) on page 11. On termination the Employer owes a Termination Administrative Charge plus run off charges per pages 22 and 24 and 25, and even a partial termination of covered employees triggers the charge. Rebate Credits stop on termination per pages 28 and 47. Most pointedly, Exhibit 7 section 9(f) on page 46 voids the network discount and minimum rebate guarantees for the Guarantee Period if the Employer exits early, which forfeits earned value. Regulatory integrity events get no special exit right. Termination here is penalized, not free.