Addendum 1 - Benefit Administration Solution RFP~2.doc

Benefit Administration Solution RFP

#24-416CMS-BENF4-B-42679

Addendum 1

The Illinois Department of Central Management Services (CMS) is issuing Addendum 1 to amend the original Request for Proposal (RFP) for the above referenced project as issued by this office on June 17, 2024, and is now considered a part thereof.

This addendum is to be acknowledged in accordance with the RFP, Subsection C.6, Offeror Questions and Agency Response. Vendors are instructed to read the entire package before attempting to complete the information required therein. All other terms and conditions of the RFP shall remain in full force and effect, unchanged except as amended hereby.

This addendum answers questions received by CMS on June 28, 2024.

Questions contained in this addendum are repeated word-for-word exactly as they were received.

General RFP

1. Extension request. Due to the scope requirements, certifications, legal review, time to secure a certified BEP partner, Illinois Procurement Gateway registration and a national holiday – we are kindly requesting a 2-week extension to ensure we have the opportunity to submit the most complete response for the benefit of CMS.

Answer: Granted. The Agency has extended the bid opening to 8/6/24 at 2:00pm.

2. What are your top priorities? (e.g., health strategy/cost, employee experience and engagement, access to data/insights) Answer: The Agency’s top priorities include employee experience and engagement.

3. What are the business drivers behind this initiative/evaluation?

Answer: The current contract will expire on April 25, 2026. The Agency is required by the Illinois Procurement Code to resolicit for benefits administration services.

4. How do people access information on their total rewards (e.g., consolidated view of benefits, comp, equity, career resources)?

Answer: Employees access information on their total rewards through a consolidated view of benefits via the current MyBenefits website.

5. How many HCM/Payroll systems are there and what solution is used? Upcoming projects (e.g., moving to new cloud solution)?

Answer: The State utilizes 23 different payrolls. Payroll files are passed utilizing the MOVEit application. At this time the agency does not anticipate any upcoming projects.

6. How are the points values awarded based on the criteria?

Answer: The technical evaluation will be based upon the Vendor’s detailed responses to each question. An Agency evaluation team will review and score each offer.

7. Please provide a list and copies (if available) of all state, local, and collective bargaining agreements that require administrative support.

Answer: See Appendix 3 attached AFSCME Contract Appendix A and B. This is the only bargaining agreement that drives the benefit plan design for the State Employees Group Insurance Program. The State of Illinois provides benefits to its employees as negotiated with AFSCME.

8. Is there a possibility to expand the NIGP codes available to this project- 91840 Employee Benefit Consulting?

Answer: Per the Commission on Equity and Inclusion (CEI) notice below, “Prime vendors that aren't self-performing BEP/VBP firms must select certified BEP/VBP subcontractors registered in at least one of the solicitation’s NIGP codes for their Utilization Plan (U-Plan).” You may request adding NIGP codes by completing Appendix 4 attached “NIGP Code Revision Request Form” and submitting to the agency at least 7 days prior to the bid opening.

Amendment No. 2 to Notice 2023.3.pdf (illinois.gov)

9. How many users from the state will need access to the benefits system?

Answer: There are currently 991 unique users for the benefits administration portal.

10. There are two enrollment periods. Will all groups convert over to the vendor in April 2026 or will the group that has enrollment first convert over and the other group convert over in the fall of 2026?

Answer: Yes. All groups will convert over to the new vendor in April 2026.

Fees

11. COLA

Answer: A COLA is not contemplated. The Agency is requesting firm fixed rates for the initial term. Vendor may offer different firm rates for each contract year during the initial term.

12. Are fees fixed during the initial term?

Answer: The Agency is requesting firm fixed rates for the initial term. Vendor may offer different firm rates for each contract year during the initial term.

13. How is the CPI Inflation “factor” under RFP A.5.2 to be calculated? Do you divide the index for December of the last year of the term by the index for the first month of the term? For example, for the initial term, would you divide the index for the first month of the initial term by the index for the last month of the initial term? Or would it just be based on the last year of the initial term?

Answer: The CPI index is applied to the rate(s) in effect during the last year of the initial term.

Expenses

14. Per RFP F.6.3, expenses are not allowed. We would typically pass through certain expenses such as postage. Should we instead include that in our fees?

Answer: Pass-through costs related to servicing of the State's membership, as identified in this subsection, will be passed through by Vendor to Agency as such costs are incurred. Vendor will not receive any markup on any pass through cost. Vendor shall, in conjunction with its submission of its monthly invoice, provide to Agency a copy of each third-party invoice reflecting passthrough costs incurred by Vendor.

The following types of pass-through costs related to servicing of the State's membership may be permitted. The Parties may agree to revise the list of permitted pass-through costs as necessary and appropriate in relation to the services identified in any resulting contract.

(1) Phone charges.

(2) Setup of Transfer Connect services with Carriers/Insurance Providers.

(3) Language line services.

(4) USPS and ongoing or special mailing fees, including post office boxes and business reply mail.

(5) Special shipping, air freight, or other special delivery (including overnight delivery) to Members, to the extent such delivery method is directed by Agency and not otherwise required by this Contract.

(6) Custom envelopes or paper stock, if directed by Agency.

(7) Printing of envelopes, forms, or statements related to general mailings or the annual enrollment process.

(8) Assembly costs associated with bulk mailings.

(9) Address verification for inactive Participants; and

(10) Other third-party charges with the advanced written

Volume Information

15. # of direct billed unpaid participants (ex: unpaid leaves, LTD, and retirees) Answer: The number of direct billed participants is 11,000 members per month.

16. # of QMCSOs received each month Answer: The number of QMCSOs with adjudicated children is 719 annually. Currently, the monthly volume is not tracked.

17. # of appeals that the vendor would need to review (annual average) Answer: The Agency is responsible for reviewing all appeals.

18. # of dependents verified in the last plan year

Answer: The number of dependents verified for the period July 1, 2023, through June 30, 2024 is 22,464.

19. # of Domestic Partner, Civil Union Partner, Civil Union Partner Children, Disabled and Other covered in medical

Answer: The numbers are as follows:

20. # of dependents with life insurance coverage only

Answer: The number of dependents with life insurance coverage only is not specifically tracked however, there are 34,200 dependent spouses and 69,675 dependent children with life insurance coverage.

21. # of retirees with retiree life only

Answer: The number of retirees with retiree life only is 684.

Eligibility and Plan Information

22. How many medical plan designs does the state have?

Answer: There are ten (10) different plan designs for the State population. There are nine (9) different plan designs for Local, TRIP and CIP.

23. Any major plan design or carrier changes expected next plan year?

Answer: Any plan design changes will be driven by union agreement provide in the response to question #7 above. There are no anticipated carrier changes for next plan year.

24. Can you provide a listing of all current third-party interfaces (inbound and outbound) that are currently in play today for health and welfare?

Answer: The current third-party interfaces are as follows:

25. If union employee benefits are offered and vary from non-union benefits, can you please provide the total number of unions, union benefits variations, renegotiation cadence, or any other special handling rules? Are there routinely mid-year enrollments or rate changes that need to be made?

Answer: The benefits offered are the same for union and non-union members.

26. What is the process for local governments for coming on and off the state plan?

Answer: Local government groups submit a cooperation agreement to join. To leave, existing groups may submit a request to opt out or choose not to resubmit a new FY cooperation agreement.

a. What is the timeframe given for how quickly they need to be integrated?

Answer: Depending on the size of the group it may varies anywhere from 30-60 days. The Agency attempts to complete internal processing in less than 30 days.

b. Is a separate enrollment period required or are they treated like a new hire?

Answer: New group members have new hire events.

27. For employees that move between the four programs, does the state limit a person to one set of benefits?

Answer: No. They must be a member in their own program but can be a dependent in one of the others. They cannot opt out of their program to enroll as a dependent under another. If both are members under the State program, they cannot be a dependent under a spouse or parent.

a. In addition, for dual enrollees what rules does the state on how those employees are treated from a benefits perspective?

Answer: See response to question #27 above.

28. We currently support MBIs instead of HICNs. Is the state amenable to that?

Answer: Yes.

29. Please provide clarification on what “rolling MAPD enrollment” means.

Answer: The State of Illinois requires eligible plan participants to enroll in the Total Retiree Advantage Illinois (TRAIL) Medicare Advantage Prescription Drug (MAPD) Program effective as of the date of their initial eligibility rather than enrolling them annually during the open enrollment period with coverage effective as of January 1st of the following year. This process is referred to as “rolling MAPD enrollment”.

30. Does the state require paper documentation for qualified status changes?

Answer: Yes.

31. Does the state require proof of a qualified status change in order of it to be processed (ex. Marriage, loss of coverage, etc)

Answer: Yes.

Data Files

32. Do all 23 payrolls and three retirement systems have the same layouts and file transmission processes?

Answer: No. One of the retirement systems has a different layout for their payroll system. All others are the same.

33. We noticed that it said payroll is run daily. Is the expectation that the vendor sends a payroll file daily? Can you please provide the frequencies for the 23 payrolls?

Answer: There is data provided to the Membership/Benefits Team, virtually every day. The current vendor provides benefit data (Pre-Pay Processing) that is then distributed to each appropriate Pay Processor. Each Pay Processor may be responsible for multiple pay schedules monthly. The Benefits files are also provided to the associated State Universities and selected Retirement Systems. There are days when there is no payroll however, this happens infrequently, less than 10 days a year.

34. What type of integration with Illinois ePay is the state looking for?

Answer: The success vendor would be required to utilize a file transfer.

35. Can you provide clarification on what “Claim payment delays for the CIP Program (claim hold)” means?

Answer: This would not be applicable to the successful vendor to manage as funding delays are managed by the Agency’s fiscal area. This solicitation language was provided for vendor awareness.

36. Can you provide clarification on “Describe in detail your ability to meet Payment Card Industry (PCI) compliance and certification?

Answer: Please see the following link to the reference guide that includes the requirements that must be met. https://listings.pcisecuritystandards.org/documents/PCI_DSS-QRG-v3_2_1.pdf Advocacy

37. Who provides your current Advocacy / Navigation services, if any? What services do they provide (example: cost transparency, provider recommendations, claims advocacy, prescription analysis etc.)?

Answer: A number of advocacy services are performed by our contracted medical vendors and others by contracted consultants.

38. How are employees finding cost and doctor recommendations for care and treatment today? Via carrier tools / representatives?

Answer: Employees are finding cost and doctor recommendations through the contracted medical plans.

39. What conditions are driving the most cost for your plans (example: cancer, diabetes, musculoskeletal)?

Answer: The most prevalent cost drivers for the Plans are cancer, diabetes, circulatory, musculoskeletal and specialty drugs.

40. Beyond your wellness program focused on education and prevention, are you planning to add any Point Solutions over the next few years that are geared towards treating conditions / injuries (examples: Hinge Health / Sword for musculoskeletal)?

Answer: Yes, there is the possibility that the Agency may explore such solutions however, any such programs/solutions will need to be bargained with the union (AFSCME).

41. How do you gather insight of employee’s perceived value regarding the benefits you offer?

Answer: The Agency does not currently have a mechanism to gather this data.

42. Do you anticipate making significant changes to your benefits in the next few years?

Answer: Please see the response to Question #7 above.

Voluntary Benefits

43. Are you leveraging a broker for any benefit services today?

Answer: No. The Agency contracts directly with Vendors for healthcare and related employee benefit services.

44. What is the intent for offering voluntary benefits? (leveraging commissions for discounting, offsetting cost)

Answer: The Agency’s purpose of offering voluntary benefits to employees is to provide them coverage (i.e., accident insurance) or tools (i.e. merchandise purchasing) that can be payroll deducted to fit the needs of their daily life. A commission or return on investment (ROI) is returned to the State on a number these programs.

45. Is the state seeking ERISA qualified voluntary plans or not?

Answer: No. The State plans are exempt from ERISA.

46. The standard we see with our client base is to payroll deduct these benefits, can we assume that the State would be amenable to that?

Answer: Yes, these benefits are currently payroll deducted.

Call Center

47. Will the insurance liaisons be permitted to transact on behalf of the employees through the call center?

Answer: Yes, if Vendor’s reference to “transact” means to complete member enrollments.

48. Do you have any cyclical events which will drive additional volume during the year outside of open enrollment?

Answer: No. The major events driving significant volume each year are the two open enrollments each year during the months of May and October 15th – November 15th .

Spending Accounts

49. Is FSA administration in scope?

Answer: The successful vendor will be responsible for member enrollment only. Administration of the benefit will remain with the contracted FSA vendor currently Optum Financial. The Agency is providing the following data for Vendor’s information.

a. How many enrolled participants are in each? FSA? DCFSA? LPFSA? (Please list out separated)

Answer: The number of enrolled participants in FSA is 17,020, The number of enrolled participants in DCFSA is 2,177. The State does not have a LPFSA therefore the number is not applicable.

b. Will we be running out any of the plans we are implementing?

Answer: No.

c. Does the state have plan year extension (grace period) or carryover?

Answer: The plan has carry over up to the IRS limitation applicable to the tax year.

d. Is there more than one FSA plan design? What is the plan design variance based on?

Answer: No, there is currently only one FSA plan design.

50. Is Commuter administration in scope?

Answer: The successful vendor will be responsible for member enrollment only. Administration of the benefit will remain with the contracted Commuter Savings vendor currently Edenred. The Agency is providing the following data for Vendor’s information.

a. What is the approximate number of commuter plan participants per month (estimates are fine)?

Answer: The approximate number of commuter plan participants is 1,823.

b. What is the desired live date? When do EEs need passes and orders in hand?

Answer: The desired live date is July 1 of each contract year. Participants need passes in hand by June 15th each year.

c. Will we need to convert in spend down credits from a prior vendor or are we starting fresh?

Answer: As stated above the successful vendor will not be responsible for benefit administration.

d. Is parking cash reimbursement required?

Answer: No.

e. Will the state provide any commuter subsidies?

Answer: No.

f. Does the state have any managed parking arrangements (i.e. rent spaces at a local garage and resell back to employees at a lower cost).

Answer: No.

g. Does the plan allow pre and post-tax benefits/payroll deductions?

Answer: Yes.

51. Is HSA administration in scope?

Answer: The successful vendor will be responsible for member enrollment only. Administration of the benefit will remain with the contracted HSA vendor currently Optum Financial. The Agency is providing the following data for Vendor’s information.

a. How many enrolled participants there in the HSA Plan?

Answer: The number of enrolled participants is 1,758.

b. What is the total amount of HSA AUM? (Assets Under Management)

Answer: The total amount of HSA AUM is $3,422,000.

c. What is the average cash balance across the population?

Answer: The average cash balance across the population is $2,037.00.

d. What is the total amount of HSA Investment AUM? (Assets Under Management)

Answer: The total amount of HAS Investment AUM is $1,899,000.

Implementation

52. For HR Data, they have this flow which makes it look like they are aggregating all demographics into 1 file. Is that accurate? Or would it be individual files from 23 agencies?

Answer: Assuming Vendor is referring to the HRIS file, data from all of our agencies and groups is gathered into one file to be sent to the current vendor from the CMS membership system and its various screens. Regarding Membership/Benefits data the Agency interfaces with the current vendor, all data is accumulated in a single data structure, including State (active and retired), College Insurance Program (CIP), Teachers Retirement System (TRIP) and Local Government (LGHP). For those four groups we maintain data in the following data groups (DB2 tables) Biographic, Resident Address, Other Address, Member Group, Payroll Schedule, Annual Salary (used for benefits cost), and Life Insurance Units (used for benefits cost)

53. What is the source of DBP and Cobra data - is it TELUS or a different org?

Answer: Terminations are reported by the State on the HRIS file which indicates if the member is COBRA eligible.

54. Will carrier files need to be sent separately for each of 4 plans? Or can it be aggregated into 1 file?

Answer: There is currently variability by vendor, we have some aggregated and some separated by plan. The flexibility is needed dependent on the vendor and operational needs.

55. Do MBE and WBE requirements apply pre-live? Or only post-live?

Answer: The Agency would anticipate that the BEP requirements would be effective beginning on date of contract execution.

56. On their current website they are allowing paper enrollment in some areas (see screenshot). This doesn’t seem to be in the RFP. Are we expected to do this?

The form appears in this AE link FY2025 Benefit Choice - Local Government (illinois.gov) for the LGHP program (see page 11-12). They state this population is only around 3K. We don’t see a mention of this in the SOW.

Answer: Local Government is the only group that utilizes the paper form to enroll because they have view only privileges on the MyBenefits website. The paper applications are sent to our office in Springfield and the Local Government unit is responsible for enrolling them via the current MyBenefits website.