Health Net 2009 Annual Report Download - page 564

ARTICLE I.
TRANSITION OF MEMBERSHIP
Section 1.1. Transition of Members. Subject to and upon the terms and conditions of this Agreement, the Parties agree to the
following:
(a) Announcement. As soon as practicable after the Effective Date, and subject to applicable Laws (including any required
regulatory notice or approval), the Administrator shall, on behalf of the Company, announce the plans of the Company to exit the
Business and terminate its operations with respect to the Business, in the Applicable State, and shall commence the process of
assisting in the transition of Employer Groups and Members to the Legacy United Entities; provided, however, that such
announcement and process shall be conducted in accordance with the Communication Plan and Schedule 1.1(a) (the “Transition
Schedule”). The Transition Schedule created by the Parties shall take into account various factors related to the timing and
coordination of the announcement and transition process, including coordination of the timing of the Company’s exiting the Business
in the Applicable State with the exit of HN Life, and timing considerations regarding Health Plan Contracts that have plans with
features administered by both the Company and HN Life. The Administrator shall use commercially reasonable efforts to facilitate
the issuance by Legacy United Entities of Legacy United Entities’ Plans in replacement of the in-force policies and other products
that constitute the Business until the termination of each policy or other product that constitutes the Business (the “Transition
Period”).
(b) Enrollment. United shall commence the process of offering, selling and enrolling Employer Groups and Members who
request enrollment in a Legacy United Entities’ Plan in the Applicable State in accordance with the Communication Plan and
Transition Schedule as soon as practicable after the Effective Date. During the Transition Period, United and its Affiliates shall not
offer or sell Fully Insured Contracts to Members or Employer Groups or enroll Members or Employer Groups in Fully Insured
Contracts or ASO Contracts other than through a Legacy United Entity and Legacy United Entities’ Plan. For the avoidance of doubt,
the preceding sentence shall not apply to United’s or United’s Affiliates’ offer or sale to Members or Employer Groups of, or
enrollment of Members or Employer Groups in, vision, dental, pharmacy, behavioral health or any other products other than the
provision of coverage or services under Fully Insured Contracts and ASO Contracts.
Section 1.2. Transition Efforts.
(a) From and after the Effective Date, the Administrator shall, on behalf of the Company, exclusively endorse the Legacy
United Entities as the recommended replacement carrier or administrative services provider (as applicable), subject to applicable
Laws and in accordance with the Communication Plan and the Transition Schedule, and shall facilitate the transition of the Employer
Groups and Members to the Legacy United Entities. The Administrator shall cooperate with United and Employer Groups in order to
assist them in effectuating the transition of Employer Groups and Members from the Company to Legacy United Entity Plans. If a
Legacy United Entity and Employer Group (and if required, Broker/Consultant) agree that such Employer Group will enter into a
Legacy United Entities’ Plan prior to the scheduled expiration date of the Health Plan Contract then in effect, then upon receipt of
written notice from United relating thereto, the Legacy United Entity shall provide to the Employer Group a mutual cancellation
agreement to cancel coverage under the Health Plan Contract as of the effective date of coverage under the Legacy United Entities’
Plan. The Administrator, on behalf of the Company, shall execute such mutual cancellation agreement promptly upon United’s
request. United will use its commercially reasonable efforts to rewrite any such cancelled Health Plan Contracts, subject to Legacy
United Entities’ Plans underwriting guidelines and other requirements, as determined in such Legacy United Entity’s discretion and as
such underwriting guidelines and other requirements are applied by such Legacy United Entity in a manner consistent with such
Legacy United Entity’s application of underwriting guidelines and requirements to business other than the Business.
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