240000001383 LTD Questions Answers.pdf
PDF 173 KB Posted
- Solicitation number
- RFP 171 240000001383 2
- Issued by
- Michigan
About this file
This is a Bidders Questions and Answers document from the State of Michigan's procurement office for Request for Proposal No. 240000001383 concerning Long Term Disability Insurance Administration Services. The solicitation seeks an administrator to manage the state's self-funded long-term disability (LTD) plan, which includes claims administration, independent medical examinations (IMEs), and payment processing services. The LTD plan features an elimination period based on the later of sick leave expiration or 14 calendar days of disability (30 days for State Police enlisted personnel), with Plan 1 providing a maximum benefit duration of 24 months following the waiting period. The administrator must process claims with appropriate categorization by Process Level Code, coordinate with state departments regarding sick leave verification, and accommodate both check and Electronic Fund Transfer (EFT) payment methods. Historical data indicates the state conducted approximately 201 IMEs annually in 2021 and 2022, increasing to 267 in 2023.
The pricing structure requires bidders to submit all fees on a per-claimant-per-month basis in Schedule B Pricing, where fees are inclusive and account for any claims open during a given month, including pending claims, newly opened claims, and previously closed claims within that period. The state anticipates maintaining consistent total premium contributions for the current plan design; however, if a proposed six-month alternative plan design is implemented in the future, the state intends to cover the entire contribution amount. Bidders must adhere to required Hybrid Contract Terms and are permitted to utilize subcontractors not exclusively dedicated to the state's LTD business. Census data current as of March 14, 2024, has been provided to bidders in Schedule J, and bidders must complete all pricing submissions through the SIGMA VSS system, which accommodates five commodity codes related to the solicitation.
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Other files
| File | Type | Posted |
|---|---|---|
| Schedule H Service Availability Report.xlsx | XLSX spreadsheet | |
| Exhibit 7 Safeguarding Contract Language.pdf | ||
| Schedule E Data Security Requirements for Hybrid Purchases.docx | DOCX document | |
| Proposal Instructions Vendor Questions WorksheetREVISED.docx | DOCX document | |
| Non-disclosure-agreement.docx | DOCX document | |
| Schedule A Statement of WorkREVISED.docx | DOCX document | |
| Schedule C Insurance Requirements.docx | DOCX document | |
| Schedule F File Layout.doc | DOC document | |
| Hybrid Contract Terms.docx | DOCX document | |
| Schedule J LTD Enrollment Census.xlsx | XLSX spreadsheet | |
| IRS Publication 1075.pdf | ||
| Schedule D Service Level Agreements for Hybrid Purchases.docx | DOCX document | |
| Schedule G Section 2 Software Table.xlsx | XLSX spreadsheet | |
| Schedule B Pricing.xlsx | XLSX spreadsheet | |
| Schedule I Sample 5 year Claims Report.xlsx | XLSX spreadsheet | |
| Department of Treasury Safeguard Requirements of Confidential Tax Data 7.doc | DOC document |
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Text version
Michigan.gov/MiProcurement
BIDDER QUESTIONS & ANSWERS
Version 2021-2
Request for Proposal No. 240000001383 Long Term Disability Insurance Administration Services
Bidders who submitted questions for the above Solicitation by the deadline have answers below.
Q # Document and Section
Page # Bidder Question Answer
1 Statement of Work Section 1.2.1
4 Referencing the LTD policy document, LTD Elimination Period is: (17) Waiting period means the period ending on the later of the following days: (a) The day after the claimant’s sick leave is exhausted or (b) The fourteenth (14th) calendar day of the claimant’s disability (30th calendar day for enlisted State Police troopers and sergeants). How is the administrator notified of the expiration of sick leave?
For some state departments, a daily State of Michigan report delivered to the Contractor notifies of the projected sick leave expiration. The report provides updated expiration dates in the event leave balances change during the initial phase of the disability absence. For other departments, communication with the applicable human resources office is required.
2 Statement of Work Section 1.2.1
4 Referencing the LTD Policy document, we were instructed to review as part of this section, regarding termination of benefits for Plan 1, the benefit (Page 9): Plan I:
LTD payments under Plan I will terminate 24 months after the date the first monthly payment was paid or would have been
Under Plan 1, the maximum length of eligibility for a benefit is 24 months for a period of disability after the waiting period, even if the employee remains totally disabled or has other income offsets. It is possible that a claimant would not be paid if the claimant was not entitled to Other Income. (See “Other Income” section) There is not a reference in the Other Income section to this specific termination provision. Does this mean if the individual cannot work, is not eligible for SS or a state pension or any other offsets that benefits terminate regardless of disability?
eligible for any disability payment because of other offsetting income.
3 Statement of Work Section 1.6.6.10
23 You require that checks expire 180 days from issuance. Do you allow for EFT payment of claims? If not, would you consider adding it to the plan?
Yes, EFT is an allowed payment method.
See the attached “Schedule A Statement of WorkREVISED” with updated language in Section 1.6.6.10 (also highlighted pale yellow), 4 Statement of Work Section 5.4.7.2
57 Under claim reporting, please explain these categories:
• Process Level Description
• Process Level Code
A Process Level Code is a four-digit number that represents an employee’s department and agency in which they work.
The first two digits represent the department, and the last two digits represent the agency. For example, Process Level Code 4748 represents Department of Corrections (47) and Bellamy Creek Correctional Facility (48).
The Process Level Description describes that location, such as “DOC-BELLAMY
CREEK FACILITY”.
Process level code will be included on the weekly file outlined in Schedule F and the description will be provided to Contractor prior to implementation.
5 Schedule B Pricing
LTD Plan Pricing Tab
For the self-funded six month maximum LTD/STD benefit plan, what elimination period would you like us to quote?
The latter of 14 days or expiration of sick leave, the same as for the existing plan.
6 Schedule B Pricing (and Statement of Work)
Various pages
Can you please provide an estimate of the annual number of IMEs performed over the last 3 years?
CY2021 – 201
CY2022 – 201
CY2023 - 267
7 Statement of Work Section 4.11 Disclosure of Subcontractors
48 It is typical for plan administrators to have subcontractors that supply services as part of the day-to-day operations for their entire book of business. These subcontractors are not hired for, or exclusive to a Contract with the State of Michigan. Can you please confirm that the State of Michigan defines subcontractors as those engaged exclusively to provide services for the State of Work in Schedule A?
No. Refer to the Permitted Subcontractor definition in Hybrid Contract Terms Section 14.
8 Hybrid Contract Terms, 1(i.)
1 Please provide us with the State physical and IT security policies
Refer to Schedule A, Section 2. For a copy of the non-public Policies, Standards and Procedures, Bidders are required to sign and email the Solicitation Manager a Non- Disclosure form (attached). See also the updated Proposal Instructions and Vendor Questions Worksheet for associated deadline to request, as well as the added Section 5.2.
9 Hybrid Contract Terms, 14
5 Does the State agree that subcontractors are those hired exclusively to perform services related to the State’s self-funded LTD business?
No. Refer to the Permitted Subcontractor definition in Hybrid Contract Terms Section 14.
10 Hybrid Contract Terms, 15
6 Does the State agree that bidders will retain authority for decisions with respect to their own personnel?
Language provided in this Section is required for this Contract. Refer to Section 6 of the Vendor Questions Worksheet and Section 6 of Proposal Instructions as it pertains to Contract Terms.
11 Hybrid Contract Terms, 25
8-9 Is the State amenable to performance guarantees in this regard?
Language provided in this Section is required for this Contract. Refer to Section 6 of the Vendor Questions Worksheet and Section 6 of Proposal Instructions as it pertains to Contract Terms.
12 Hybrid Contract Terms, 31
10-11 Is the State willing to negotiate on the indemnification terms in the standard Hybrid Contract?
Language provided in this Section is required for this Contract. Refer to Section 6 of the Vendor Questions Worksheet and Section 6 of Proposal Instructions as it pertains to Contract Terms.
13 Hybrid Contract Terms, 33
11-12 We have an Administrative Services Agreement (ASA) tailored to LTD claims administration services. Is the State amenable to considering the limitations of liability in our ASA?
No, Language provided in this Section is required for this Contract. Refer to Section 6 of the Vendor Questions Worksheet and Section 6 of Proposal Instructions as it pertains to Contract Terms.
14 Schedule B Pricing
LTD Plan Pricing Tab
Please clarify what is meant by having a fee basis of “per claimant per month.”
• Does this mean newly opened claims per month, Or
• Does this mean all claims open in a given month? And if so, how is this measured?
− Are any claims that were open at any point in a given month counted toward this total, or
Any claim open within the month, from the 1st day to the last day of the month. This includes pending claims, claims that were open on the 1st of the month and then subsequently closed, and all other open claims. Approved claims will be considered closed based on the paid through date unless otherwise indicated by bidder.
− Is there a snapshot of open claim counts at a specific, pre-defined, point in each month? And if so, when shall this snapshot be taken?
− For either of the above, would a claim be counted if it is only an open, approved claim, or shall pending claims be counted as well?
15 Schedule B
Pricing LTD Plan Pricing Tab
Does the state anticipate maintaining the same level of contributions for each plan going forward?
How does the State expect its contributions will change under the proposed 6-month alternative design?
The state anticipates the same total premium for both plans under the current plan design.
If the proposed 6-month alternative plan design was implemented in the future, the intention would be for the state to cover the entire contribution amount. Please note that as a self-funded plan, treatment of the premium is not relevant to the Contractor and Bidder’s response to this RFP.
16 Schedule B Pricing
Information al Data Tab
Please provide a recent census with:
• Age/DOB
• Gender
• Zip code
• Salary
• Sick Bank Time
• Benefit Class
Census data showing the requested information for employees enrolled in the LTD plan as of 3/14/24 is accessible via the (attached) Schedule J LTD Enrollment Census.
17 Proposal Instructions Vendor Questions
3-4 The Respond to Lines section of the SIGMA VSS system shows 5 separate commodities for the LTD bid. Our fee and
All pricing should be submitted in Schedule B Pricing. There were 5 lines inserted to accommodate five commodity codes
Worksheet –
SIGMA VSS
system submission.
contract amount are inclusive, they are not broken down by separate components.
Please confirm if each line must be completed, and if so, clarify what information is expected in each section.
related to this solicitation (SIGMA VSS sends alerts to vendors based on commodity codes). These lines do not need to be completed, however due to SIGMA functionality, it may require you to not leave the field blank, therefore enter a value such as $1.00.
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