Addendum1~1.docx

Flexible Spending Administration Services RFP

#23-416CMS-BENF4-B-30088

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 August 10, 2022 and is now considered a part thereof.

This addendum is to be acknowledged in accordance with the RFP, Subsection A.6, Bidder Questions and Agency Response. Vendors are instructed to read this 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 August 25, 2022. Questions contained in this addendum are repeated word-for-word exactly as they were received.

RFP A.11 - May we assume there is no performance bond required?

Answer: Correct. There is no performance bond requirement.

RFP A.20 - Is it correct that the State is not requesting client references?

Answer: Correct. The State will not be evaluating references.

RFP A.24 - If our firm performs all functions, is there a waiver we can submit? Can you provide the company names of any firms currently providing services through the utilization plan?

Answer: The solicitation has a requirement for Business Enterprise Program Goal. Failure to meet the goal or demonstrate a good faith effort may render your offer non-responsive. Please refer to Utilization Plan Version 21.0.pdf attached to the solicitation posting.

RFP D.1 - Can you provide a list of the participating entities (State universities and agencies, constitutional offices and legislative officials) or otherwise quantify the number of payroll centers and participating entities?

Answer: All State of IL Agencies and Universities can participate in the FSA program; they all use CMS as the pay center. The HSA program is broken up into 14 pay centers (State of Illinois, 10 Universities and 3 University organizations).

RFP D.1 - With regard to the HSAs:

0. Is there a State contribution to HSAs? If so, how much and what is the frequency?

Answer: The employer contribution is $500 for an individual policy or $1,000 for an employee plus one or more dependents. Employees electing the benefit during Benefits Choice will receive the deposit in June to start the new plan year in July. New employees or employees changing their benefits due to a qualifying event will have their HSA funded when their event is completed. This occurs bi-weekly.

0. How many qualified HDHPs are offered?

Answer: There is one (1) HDHP offered.

0. What are the total HSA assets?

Answer: $1,788,961.00

0. What is the account holder investment threshold?

Answer: The account holder must have $1,000.00 in the account before opening an investment account.

0. Is there a threshold after which the monthly administration fee is waived?

Answer: No.

RFP D.2.2.8 - What is expected for a fraud prevention/detection plan? This is typically a requirement for medical plans, but not for FSAs or HSAs.

Answer: To ensure providers/participants are abiding by the IRS rules of the program as well as identifying unauthorized use of participant cards/resources.

RFP D.2.2.9 - May we assume that documents and forms can be made available electronically rather than in hard copy? Is the Notice of Privacy Practices the Vendor notice or the State notice?

Answer: Documents and forms can be made available electronically. The Notice of Privacy Practices is the Vendor notice.

RFP D.2.2.18 - For the 10 events, are these held on consecutive days? Over how many days? For what length of time? Can you send a sample schedule of events and locations?

Answer: Please see the sample schedule below. All vendors were available at the locations listed below, though benefit fairs have transitioned to a virtual format.

RFP D.3.2.1 - Can you further describe the funding arrangement? Who holds employee contributions? Will the State consider other funding options under which the vendor issues payment from a vendor-owned account and allow the State to hold funds?

Answer: For FSA, the State holds the funds and pays claims daily from reporting provided by the vendor. For HSA, the vendor receives the contributions and handles payment of claims. Other funding options will not be considered.

RFP D.3.1.6.5 - What is expected for the savings report? Can you provide a sample of the current report?

Answer: The savings report provides the number of enrollments and payroll contributions received.

RFP D.3.2 - Card Adjudication Rate is set at 90%. This is a subjective measurement and varies amongst employers based on a number of factors such as types of underlying health plans, types of copays, and communication efforts by employers, understanding of how to use cards by consumers, vendor compliance (or non-compliance) with regulations, etc. This requirement seems to encourage circumventing of IRS requirements to substantiate certain card transactions and encourage vendors to not follow IRS guidelines. Can this be removed as 90% is not realistic and this is a subjective measurement? What is the current auto-adjudication rate for the past three years?

Answer: The agency is removing this performance metric.

RFP D.3.2 - Debit Card Fulfillment – Can this be removed since the card vendor cannot make this guarantee?

Answer: No.

RFP D.3.2 - Surveys – With debit cards in place, it is not realistic to expect a 91%+ satisfaction rate. Can this be changed to a realistic measurement, such as 75-80%?

Answer: The Agency agrees to move the metric to 85%.

RFP D.4.1.3 – Please describe the current funding arrangement in detail. Who holds employee pretax FSA contributions? Will other funding arrangements be considered?

Answer: See response to Question 9.

RFP D.4.3.3 - What is required in the mailing and can you quantify the number of mailings? Will the State consider electronic solutions?

Answer: The Agency will accept electronic communications, but not exclusively. More importantly, we would be interested in learning what the vendor's proposed marketing campaign would look like. How would you support Benefits Choice to increase engagement in the program?

RFP D.4.6.10 - Since card adjudication rates are subjective and depend on many variables, how is this information used or how is it relevant?

Answer: This information will be used to measure vendor efficiency and participant satisfaction.

RFP D.4.7.4 - Can you define “vendors associated with debit card program?” Who are the “vendors” in this section?

Answer: This is for vendors that do not administer their own debit card. If the selected vendor does not administer their own card, the selected vendor is required to abide by the card administrator’s agreement.

Section 2.D – Please provide the current fees billed to the State by the incumbents for both FSAs and HSAs as this information is relevant.

Answer: The current fee for the FSA is a $1.85 per participant per month. The current fee for HSA is $2.75 per participant per month.

Section 2.D.3 – What is this referring to? What are “expenses allowed?”

Answer: Expenses are not allowed. As an example, the State cannot reimburse Vendor for travel expenses.

FSA Reference Guide – This indicates that copay and deductible expenses paid by debit card are auto-adjudicated.

0. Since the regulations do not allow deductible expenses to be auto-adjudicated, is this accurate or a mistake? How is the current vendor auto-adjudicating deductibles expenses? What about coinsurance expenses?

Answer: Deductible and coinsurance are not auto substantiated, but the debit card transaction is auto approved at the point of sale. The participant submits substantiation to the vendor.

0. Are carrier out-of-pocket claim files in use? If so, for which health plans and what is the auto-adjudicate rate for the carrier file processing?

Answer: No. N/A.

Attachment 1 – Can you define what type of affiliation or relationship? For example, our firm has provided bid responses through Segal. Is this considered an affiliation or relationship?

Answer: No, this is not considered an affiliation or relationship.

Attachment II – If we execute a HIPAA Business Associate Agreement with the State, is a Trading Partner Agreement necessary?

Answer: Both a BAA and TPA will be required.

How many employees are currently enrolled across all products? The total number of participating employees is typically less than the total number of accounts, because there are usually some employees enrolled in more than one product.

Answer: 16,584. Total number of participants participating in MCAP, DCAP, or HSA removing any duplicative enrollments.

What is the average annual spending per account for each of the current products?

Answer: HSA: $647.00., MCAP: $1,437.00. DCAP: $3,737.00 What is the average HSA account balance (cash and investments) per participant?

Answer: $2,861.00 How many employees are enrolled in the High Deductible Health Plan?

Answer: 1,318.

How is the FSA/MCAP funded today? Does the State fund claims as they are paid or keep a replenishment account? What is the frequency of FSA funding?

Answer: See response to Question 9.

How are HSA contributions funded? Do you remit funds via wire or ACH?

Answer: ACH.

Please describe the report outlined in the Statement of work - Section D.3.1.3.2 “Disposition Report by Program (DCAP, MCAP, HSA)”. Is this an enrollment by product report?

Answer: This report details how claims are processed (paid, pending, denied).

Are there any communication or benefit education challenges the State would like to address?

Answer: No.

Will employees have the opportunity to enroll in these benefits at the same time and on the same platform as medical? If so, do these benefits immediately follow medical in the enrollment flow?

Answer: The response to both is Yes.

Would the State be agreeable to consider the carrier coordinating an enrollment communication campaign for these benefits?

Answer: See response to question 15.

The RFP mentions benefit fairs. When does the State typically hold onsite events? If so, are they throughout the year and/or during annual enrollment? At how many locations and how many employees are expected to attend? Are there any expected changes to this strategy in light of the pandemic?

Answer: Please see the sample schedule in Question 8. Attendance will vary as events typically serve large employee groups (large agencies, universities). Vendors and CMS will agree to attendance as approval is needed prior to entering state facilities. Due to the pandemic, enrollment fairs and information sessions were moved to a virtual format. This format will remain in place, with in-person fairs being utilized again.

Please provide the total HSA assets under management (split by cash and invested dollars if possible) Answer: See response question 5 c.

What platform does the state use for HRIS/payroll?

Answer: The agency uses LifeWorks, it’s online enrollment vendor for payroll.

Are there any existing integrations with Payflex or CYC/Optum for claim payments or debit card adjudication?

Answer: No file/data integrations with vendors. CMS provides copayment lists for the medical, dental, pharmacy, and vision plans to substantiate FSA debit card transactions.

Does the Business Enterprise requirement need to be active now or simply in place by contract go live?

Answer: The Business Enterprise program requirement would need to be effective at the start of the go live.

Any pain points w/ Payflex or CYC/Optum today?

Answer: No.

Does the State have any expectations of branding for the online portal and printed material?

Answer: Yes, the State wants co-branding.

Additional costs that may be incurred for mail fulfillment, custom branding, custom reporting, audit rights, etc. - are we able to pass along any such costs to the State?

Answer: No, the State will not pay pass through costs. All anticipated costs should be included in the fee.

What type of custom reports are being utilized by the State today?

Answer: The report listing in Section D.3 is the full report listing needed at this time.

What does the state intend to audit?

Answer: The Bureau/Agency and Vendor may subject to program audit by the Illinois Auditor General’s Office or Agency Internal Audit during the term of any resulting contract.

Please provide the State's holiday closure schedule.

Answer: New Year's Day, Martin Luther King Day, Lincoln's Birthday, Washington's Birthday (President’s Day), Memorial Day, Juneteenth, Independence Day, Labor Day, Columbus Day, General Election Day, Veterans' Day, Thanksgiving (Thursday and Friday), Christmas.

The "Notice to Bidders and Offerors Regarding Acceptance of Only Electronic Submissions" indicates that the agency shall only accept electronic submissions. However, the RFP document and BuyBid site seem to indicate hard copies are also required. Please confirm which is correct.

Answer: The Agency will only accept electronic offers. Offerors are required to respond in BidBuy with their electronic offer including all packets. Please refer to the Notice of Electronic Submissions Only.pdf attached to the solicitation notice in BidBuy.

What are the Assets Under Management (AUM) for the HSA program?

Answer: See response to question 5c.

Is there any employer contribution for participating in the HSA program?

Answer: See response to question 5a.

What is the average account balance of the 1,039 HSA accounts?

Answer: See response to question 25.

Are deviations or alternate suggestions permitted to the General Service Requirements?

Answer: No.

How is “present emergency situation” defined? What type of “emergency” could occur with a reimbursement FSA plan? Can you provide some examples?

Answer: How would the vendor’s representatives handle an inquiry if the caller experienced a physical or mental health emergency during their interaction?

Who is your current Plan administrator?

Answer: ConnectYourCare, LLC How long have you had the HSA plan in place?

Answer: The HSA has been in place for approximately two years.

What are the assets of the HSA plan? Cash balance? Investments?

Answer: See response to question 5c.

Are there any areas of administration that you are dissatisfied with currently? Or that you would like to enhance?

Answer: No.

Are you interested in offering any Lifestyle accounts to your participants?

Answer: The State is not interested in Lifestyle accounts at this time.

Is the bid answered on BidBuy and packets of information delivered to your office?

Answer: Offerors are required to respond in BidBuy with their electronic offer including all packets. Please refer to the Notice of Electronic Submission Only.pdf attached to the bid.

Are electronic signatures accepted?

Answer: Yes, electronic signatures are accepted.

Please confirm the MBE/WBE percentages for this contract?

Answer: The Business Enterprise Program goal is 2% of the administrative cost of the contract.

Question D.3.1.2.1 Daily Banking Report including, at a minimum: beginning balance; checks/payments/card transactions issued; checks/payments/transactions cleared; and ending balance. What type of report is the State really looking for? Some data falls in HIPPA privacy.

Answer: This report would provide aggregated account data. The Agency understands the vendor cannot provide individual HSA balances.

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