200000001275 - Bidder Questions & Responses - Flexible Spending Account.xlsx
XLSX spreadsheet 45 KB Posted
- Attached to
- Flexible Spending Accounts
- Solicitation number
- RFP 171 200000001275 2
- Issued by
- Grand Traverse County, Lansing City, Michigan
About this file
This file contains bidder questions and state responses for Request for Proposal No. 200000001275 issued by the State of Michigan for Flexible Spending Account (FSA) third-party administrator (TPA) services. The RFP seeks a vendor to provide comprehensive FSA administration including claims processing, participant support, debit card management, and system hosting. The anticipated contract begin date is August 1, 2020, with an initial contract term expiring December 31, 2023. The contract includes renewal options for up to seven additional one-year periods. The state anticipates one on-site training session for fewer than 20 staff, with follow-up webinars as a consideration. No on-site enrollment meetings are required. The award date depends on negotiation timelines, with the specific timeline provided in the proposal instructions.
The incumbent vendor is WageWorks operating under contract 071B1300275 with total annual spend of $4,536,593.00. In 2019, the state processed 46,397 total claims with 58.6 percent submitted online, 34.3 percent via mobile app, and 7 percent via fax or mail. The state maintains Healthcare FSA and Dependent Care FSA plans with 222,060 Healthcare FSA debit card transactions auto-adjudicated in 2019 and $14,483,178.62 in Healthcare FSA card spend. Claims funding occurs on a weekly invoice basis with state payment required within ten business days. The state requires SOC 2 Type 2 compliance, government or private cloud hosting, and compliance with Michigan law regarding fingerprint background checks, though Federal Tax Information requirements do not apply to this contract. The contractor must utilize state-defined unique participant identifiers and maintain accuracy service level agreements with slightly larger margins allowed in the first contract year.
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Sheet1
STATE OF MICHIGAN
Request For Proposal No. 200000001275 Flexible Spending Account
| Q # | Document and Section | Page # | Bidder Question | State Answer |
| 1 | N/A | Does the state currently have a TPA providing these services under contract? If so, could you provide the name of the vendor and contract number? | The current contract (071B1300275) is with WageWorks (https://www.michigan.gov/documents/buymichiganfirst/1300275_353545_7.pdf) | |
| 2 | N/A | If there is a contract in place, could you also provide the total spend on that contract | $4,536,593.00 | |
| 3 | N/A | The RFP notes that the awarded contract will expire on December 31, 2023. Are there any renewal options that will likely be available? Are these services needed on a continual basis, and will the state need to rebid these services again in the future as this awarded contract nears expiration? | The second paragraph of the Contract Terms states: "This Contract may be renewed for up to 7 additional 1-year period(s)." |
Yes, the services are needed on a continual basis.
Yes, a solicitation will be conducted in the future to rebid these services.
4 Schedule A - Statement of Work - General Requirements 2 Can you please include the attached referenced FSA Plan Booklet? The link in the document does not work. This is a direct link to the FSA plan booklet on our public facing website:
https://www.michigan.gov/documents/mdcs/2020FSABook_669032_7.pdf
Press Ctrl when selecting link in Schedule A when it's a Word document
| 5 | Who is the current FSA vendor? | Please see response to Question 1 |
| 6 | Can you disclose the current Per Participant Per Month FSA Administrative fee? Does this fee include the debit card? | This information can be found in the current contract (see response to Question 1); there is no separate fee for the HC FSA Card. |
| 7 | When is open enrollment? | Open enrollment will be held in November of 2020 and then October of each year after that beginning in 2021. |
| 8 | What is the claims funding arrangement and frequency of funding between the State and [Contractor]? | Current claims funding arrangement is the Contractor invoices SOM on a weekly basis and funds are then sent from the SOM via electronic funds transfer (EFT). |
| 9 | Will the vendor have ACH access to a State bank account for claims? | No, claims must be invoiced to the SOM in order for vendor to receive payment. |
As stated in Requirements 1.E.2.The Contractor must accept fund transfers from the State on a mutually agreeable timeframe, no more frequently than weekly for claims reimbursement and on a monthly basis for administrative fees. The State does not allow account debits.
| 10 | Does the State desire or expect onsite FSA enrollment meetings? If yes, approximately how many and how many locations? | No, this is not a requirement. |
| 11 | Approximate award date? | The actual award date depends on the timeline of negotiations. The Anticipated Contract Begin date (August 1, 2020), is provided on the RFP Timeline; first page of the Proposal Instructions document. |
| 12 | Will the State provide SSN as the primary identifier on all file? | Both the SSN and Employee ID# will be provided on all files. |
Please note, as stated in Requirements 1.C.5.The Contractor must utilize a State-defined unique participant identifier (e.g., 6 or 7-digit Employee ID Number) in all participant specific reporting, correspondence, web access identification and claim forms.
13 Schedule A Background 1 During 2019 how many claims were submitted by:
• Online
• Mobile app
• Fax
• Mail How many debit card transactions? Total claims were 46,397 (this does not include HC FSA Card substantiation):
Online: HC FSA claims 19,591 (42.2% of total claims); DC FSA claims 7,617 (16.4% of total claims). Total online claims were 27,208 (58.6% of total claims).
Mobile App: HC FSA claims 9,559 (20.6% of total claims); DC FSA claims 6,377 (13.7% of total claims). Total mobile app claims 15,936 (34.3% of total claims).
Fax/Mail: HC FSA claims 2,618 (5.6% of total claims); DC FSA claims 635 (1.4% of total claims). Total Fax/Mail claims 3,253 (7% of total claims).
Number of HC FSA Card transactions is unavailable but HC FSA Card spend for 2019 was $14,483,178.62 (84.92% of total HC FSA spend)
| 14 | Schedule A.1.B.1. | 3 | How many payroll centers will sends files? | There will be one source (SOM) that will send these files. |
| 15 | Schedule A 1.B.5 | 4 | Is this request for real-time updates for “one-off” requests? | Yes |
| 16 | Schedule A 1.C.4 | 5 | Are carrier claim files in used now? If so: |
• For what carriers?
• What is the frequency of processing carrier files?
• Are the files used for claim reimbursement and/or debit card adjudication?
• If used for debit card adjudication, what percentage of overall card transactions were auto-adjudicated in 2019? Yes; health, Rx, dental and vision carriers.
The frequency varies, typically weekly or monthly.
Claims are used for HC FSA Card adjudication.
222,060 HC FSA Card transactions were auto-adjudicated in 2019 - this number is all-inclusive of auto-adj and cannot be broken out to show only carrier file auto-adj.
| 17 | Schedule A 1.E.3 | 7 | How will prior year forfeitures be provided to help fund current year claims should the prefund amount and/or contributions not be sufficient? | Forfeitures are used internally to offset administrative costs. Claims will always be paid when invoiced since the overall group insurance fund has an adequate balance. | |
| 18 | Schedule A 1.F.3 | 8 | Most callers utilize relay services or engage a personal representative to assist. Since TTD and TTY are rarely used, is this required? | ||
| With live help and extended hours 6 days a week, IVR is rarely used because consumers utilize newer technology solutions such as mobile apps. Is this a requirement? | A comparable and mutually agreed upon alternative to TDD may be acceptable. |
If you have exceptions to this requirement, list them in your response and explain in detail what alternatives to an IVR you offer.
| 19 | Schedule A 1.F.9 | 9 | How does the State disseminate or otherwise make available the employee educational material? | The SOM has an FSA dedicated web page (www.mi.gov/fsa) that houses educational materials. Communications (emails and mailings) are sent to FSA participants throughout the plan year by the current TPA and the SOM sends numerous emails (and mailings if no email address in on file) during the open enrollment period as well. |
| 20 | Schedule A 1.F.13 | 10 | Since most claims are submitted online or via mobile app, or cards are used, is it required to include paper forms with the welcome letter? | Yes, the SOM participant population uses all of the listed claim submission methods, therefore, it is important to include the forms or at least provide clear instruction on how to obtain the forms. |
| 21 | Schedule A 1.2 | 11 | Please quantify what you anticipate for the number of on-site training events. |
For how many will the training be provided?
| Will a combination of on-site and/or webinars be considered? | Anticipate 1 on-site training session for less than 20 staff. Follow up webinars may be considered. | ||||
| 22 | Schedule A 4.1 A-B | 22 | For the 2021 plan year, will the State consider having the incumbent provider handle 2020 runout claims? | This is something that the SOM may consider. Please note that the Transition Out plan referenced in 4.1.B. is referring to the transition out at the end of the new contract with the bidder that is awarded this contract (so 12/31/23 or after depending on if option years are exercised), not the transition out of the current contract that expires 12/31/20. | |
| 23 | Schedule A 5. | 25-27 | Who is the consultant that has performed audits? |
For how many days was the consultant on site?
What was the total cost of the most recent audit?
Do you anticipate the scope of the audit to remain the same? Or will the scope change? If so, describe the difference.
What is the anticipated cost of such a future audit?
It is not reasonable for a TPA to agree to an open ended cost for which it has no control or even influence. The SOM's current benefits consultant is Willis Towers Watson.
On average the consultant is onsite between 2-3 days.
There has not previously been an implementation audit conducted on the FSA contract.
We don't currently anticipate the scope of the audit changing, however if it were to in the future, the contractor would be notified in advance of what the scope entails. The anticipated cost of a future implementation audit shouldn't be over $35,000.
| 24 | Schedule A 5.A.2 | 26 | Does this mean submitting claims to the TPA for review and handling that are not real claims? Please elaborate on this requirement. | Yes, this would be the SOM or consultant sending test files and claims through to the contractor with fictitious data, then review and validation of how the claims would be processed by the contractor would occur to ensure claims are processing accurately. |
| 25 | Schedule A 5.D. | 26 | What is an "annual benefit audit? | Review of system programming to ensure alignment with SOM plan design and rules as well as desktop review of contractor's plan documents and reference materials for staff. |
| 26 | Schedule A 5.H. | 26 | To what does H refer? What signature on what documents are required? | This is referring to audit findings that would identify instances in which the contractor over/undercharged the SOM due to inaccurate processing errors. |
Signatures from representatives of both the SOM and contractor agreeing to audit findings.
| 27 | Schedule A 6.#3 | 28 | Why does the accuracy SLA increase in subsequent years? | There is a slightly larger margin of error given to the contractor in the first year, after this the expectation is that any issues/errors that may have occurred have been addressed and rectified for future years to come. |
| 28 | Schedule A 6.#3 | 29 | It appears the accuracy SLA is measured by an annual third party audit but the reporting requirement is quarterly. Is this correct? If so, how is this possible? | Thank you for pointing this out, the SLA content in Scheduled A has been revised to address this. The new document is 2. 200000001275 - Schedule A - Statement of Work - Flexible Spending Account 4-3-2020. |
| 29 | Schedule A 9.1.D | 33 | How was the prefunding amount determined? |
Has the prefunding been sufficient to cover paid claims in prior years?
How soon does the State pay following receipt of the claim invoice? Prefunding amount is based on previous experience.
Yes, the prefunding has been sufficient in prior years.
As stated in 9.1.B. The Contractor must allow for the State to submit payment for claims and administrative invoices within 10 business days of receipt of the invoice.
30 2020 FSA Plan Booklet 1 How do employees elect to accelerate contributions?
How many employees chose this option in 2019?
How does this impact the prefunding of claims?
If a participant terminates employment mid-year, when does FSA coverage end?
Is it for both health care and dependent care?
Why was this feature offered to plan participants? Employees can elect to accelerate their deductions by submitting a form to the Employee Benefits Division (EBD) to continue their HC FSA (COBRA) after departure.
Roughly less than 5% of participants accelerated their contributions in 2019.
Accelerated contributions do not impact prefunding; invoiced claims by Contractor to SOM are currently paid weekly.
If a participant terminates employment mid-year (and has not achieved their annual goal) coverage terms at the end of the pay period in which they depart.
No, COBRA only applies to HC FSA. The feature is offered to assist participants in achieving their annual goal.
| 31 | 2020 FSA Plan Booklet | 8 | How and when is the $50 minimum calculated? For example, if a person has $55 left on December 31 and does not re-enroll and files a claim for $10 on January 15th for expenses incurred in the new plan year, does he or she lose the other $45 because it is now below the $50. What if the expenses were incurred during the previous plan year? | If an employee does not enroll in a HC FSA plan for 2021, the minimum amount they’ll be allowed to carryover from their 2020 account is $50. This amount will be determined after the 2020 plan year and run-out period has concluded (3/31/2021). If a participant submits a 2021 claim and does not have 2021 funds it will pay using their 2020 funds during the run-out period. If they did substantiate a 2020 claim during the run-out period that resulted in them falling under the $50 minimum, they wouldn’t be able to carryover the remaining balance. |
| 32 | Schedule N 3.d | 1 | Under what circumstances is data be shared with a vendor partner? |
What type of data would be shared?
| With which vendor partners is data shared? | HDHP administrators, such as BCBSM; expenses paid out of HSA and/or employee contributions elected if done so through you the HSA contractor and then passed through HDHP admin to the SOM. | ||||
| 33 | Schedule N 3.f | 1 | Since there is no adjudication or claim processing, may we assume this and other similar questions are N/A? | Yes, it would be appropriate to consider this questions N/A to HSAs. | |
| 34 | Contract | 7 | Will the agency be performing background checks on contractor staff under item 16? If so, is there a cost to the contractor? | The State cannot perform background checks on Contractor employees. If a Contractor is requested to perform a background check on an employee, the Contractor is to pay the cost. | |
| 35 | Contract Schedule E | All | Our system is proprietary and there is no licensing or source code provided. We provide an employer portal and participant portal. Does this apply and how? | Schedule E is exclusive to system availability. SCHEDULE E, EXHIBIT 1 Support Services and Service Level Agreement for Hosted Services. |
Should there be sections that your company deems do not fit within the scope of it's offerings, redline them and they can be negotiated at a later date, if necessary.
| 36 | Contract Schedule F 3.1 | 28 | Please describe "government cloud solution." Does this mean the contractor may not host the data? | The State is allowing either a physical hosting center and/or a cloud environment. The contractor can sub-contract the hosting of SOM data in cloud environment, “gov” cloud, which means it can have a contract with any cloud provider. |
| 37 | Contract Schedule F 3.1 | 28 | As an independent TPA our firm has never had a request for a SOC 2 Type 2. We can provide a SOC 2 Type 1. Is this acceptable? | The State requires a SOC 2 Type 2 since it provides attestation that the controls are working over a minimum six-month period. |
| 38 | Standard Contract Terms | 7 | Section 16 of the Standard Contract Terms provides: “Pursuant to Michigan law, all agencies subject to IRS Pub. 1075 are required to ask the Michigan State Police to perform fingerprint background checks on all employees, including Contractor and Subcontractor employees, who may have access to any database of information maintained by the federal government that contains confidential or personal information, including, but not limited to, federal tax information.” Do you envision that the successful bidder will need to perform fingerprint background checks on its employees under this provision? | Since this contract does not utilize Federal Tax Information (FTI), there is not fingerprinting requirement related to IRS Pub 1075. |
| 39 | Standard Contract Terms | 11 | Will the State consider making Section 34 of the Standard Contract Terms (Limitation of Liability and Disclaimer of Damages) mutual? | Bidders can provide redlines to the Standard Contract Terms with the understanding these changes may be negotiated at a later date. |
| 40 | Proposal Instructions, 6. Delivery of Proposal | 3 | Are attachments allowed to be submitted in PDF format to meet the 6MB or less file requirement? | Attachments should be submitted in original document format, but a pdf may also be submitted. Since all bid documents need to also be emailed to the Solicitation Manager (and multiple emails are allowed), this shouldn't be a problem. If SIGMA does not allow all files to be uploaded due to the pdf size, ensure the pdf versions are included in the email and note the SIGMA restriction. |
| 41 | Proposal Instructions, 15. Confidential Treatment Form and the Freedom of Information Act | 6 | Is only one public copy is needed? Should it be submitted electronically or in hard copy format? | A public copy is only needed in electronic format. |
| 42 | General Question | N/A | How many quarterly meetings were virtual versus in person in 2019? Does the State anticipate any changes with this based on recent changes due to the coronavirus? | 3 virtual; 1 in person |
This will be evaluated in the future based on needs at the time and health/safety considerations will certainly be a determining factor as well.
43 General Question N/A Please describe your current phone tree setup. Employee Benefits Division Phone Tree Setup:
Queue to Skill Group - Play EBD Message_Menu_wave - "Welcome to the Employee Benefits Division. Please select one of the following options: If you are calling in regards to Flexible Spending, press 1. If you are calling in regards to Qualified Transportation Fringe Benefits, press 2. If you are calling in regards to making a COBRA payment, press 3. For all other question, remain on the line and your call will be directed to the next available representative." Once selecting prompt 1, call is routed to first available agent.
| 44 | General Question | N/A | How are participants submitting claims (e.g., web, mobile, fax, card)? What percentage of total claims are submitted through each method? | See response to question 13. | |
| 45 | General Question | N/A | What is the total number of claims paid by quarter for the last three years? | ||
| CY | 2017 | 2018 | 2019 | ||
| 1st Qtr | 6,166,382.62 | 7,088,658.89 | 7,179,366.35 | ||
| 2nd Qtr | 4,486,882.38 | 4,311,505.66 | 4,484,195.60 | ||
| 3rd Qtr | 2,796,229.35 | 2,989,848.27 | 3,016,446.96 | ||
| 4th Qtr | 2,205,305.10 | 2,304,261.05 | 2,307,236.75 |
46 General Question N/A Who are your current vendors (medical, dental, vision, Rx)? Are there other FSA-eligible vendors the service provider is expected to integrate with? Medical: BCBSM, BCN, HAP, PHP, McLaren, Priority Health, COPS Trust Rx: OptumRx Dental: Delta Dental, Midwestern Dental Vision: EyeMed
| 47 | General Question | N/A | What number or percentage of your FSA participants have downloaded the WageWorks mobile app? | For the 2019 plan year, there were 5,269 unique users using the WageWorks mobile app. |
| 48 | General Question | N/A | Do you have an aggregate participant utilization report for the WageWorks site such as the number of logins/site visits by the State’s participants in 2019? | Between 01/01/2019 and 12/31/2019, there were 58,809 successful Participant logins to the WageWorks Participant site. |
| 49 | General Question | N/A | What is your auto-adjudication rate with Wage Works? | See response to question 16. |
| 50 | General Question | N/A | How many participants are in TI status (i.e., card turned off)? | As of 3/30/20, 584 |
| 51 | General Question | N/A | How many member service phone calls relative to FSA have been received in each of the last three years? | State of Michigan (Employee Benefits and HR Service Center) FSA Calls: |
2017 - 4,314 2018 - 3,483 2019 - 2,827 52 General Question N/A How many total members service phone calls has WageWorks received for your participants in each of the last three years? Total calls received in 2017 were 17,663 Total calls received in 2018 were 22,845 Total calls received in 2019 were 17,027
| 53 | General Question | N/A | Can we obtain a breakdown of the reason for the calls? | Top 5 reasons for calls were: Card Use Verification, Card Questions, Pay Me Back, Card not working, Balance inquiry |
| 54 | General Question | N/A | Please provide the number of emails to the customer service center. | Data unavailable |
| 55 | General Question | N/A | Please confirm the methods for language support (written communication, online, phone, etc.). | Written communication (email & paper), online (TPA & EBD web) and phone support |
| 56 | General Question | N/A | What percentage of your population has access to a smartphone or computer? | We believe the majority of our population has access to either a smartphone or computer but would not be able to provide a specific percentage. |
| 57 | General Question | N/A | Is the State planning to seed the HSA? | HSA plan design has not been finalized, so unable to confirm at this time. |
| 58 | GENERAL | N/A | Is it possible to provide summary data of 2018 & 2019 utilization/forfeiture experience? | |
| 59 | 2020 FSA Plan Booklet / Payment Options | Pg. 8 | Does the State have any concerns with providing Dependent Care participants the option of using the Card as a payment method? | TBD; this would need to be proposed and fully reviewed before a determination could be made. |
| 59 | Proposal_Instructions-CT-Vendor_Questions_Flexible_Spending_Account | Page 2 of 13 | The Proposal Instructions direct bidders to complete and submit Schedule F – Exhibit 1 -Contractor’s Disaster Recovery Plan, however, such an exhibit was not in the contract terms. Confirm that Schedule F, Exhibit 1 would be the bidder’s disaster recovery plan submitted as an exhibit document. | SCHEDULE F, Exhibit 1 - Contractor’s Disaster Recovery Plan is on p. 32 of the Contract Terms document (8. 200000001275 - Contract Terms - Flexible Spending Account). |
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