GICPND1706 RFR.docx

THE COMMONWEALTH OF MASSACHUSETTS

GROUP INSURANCE COMMISSION

19 STANIFORD STREET, 4TH FLOOR

BOSTON, MA 02114

REQUEST FOR RESPONSES

GICPND1706

Providing Long-Term Disability Benefits for Active Employees of the Commonwealth of Massachusetts

November 16, 2016

TABLE OF CONTENTS

PAGE

NOTICE TO LONG TERM DISABILITY INSURANCE CARRIERS i

SECTION I RFR REQUIRED SPECIFICATIONS iii

SECTION II COMMBUYS DOCUMENTATION xi

SECTION III PROCUREMENT CHECKLIST 1

SECTION IV BACKGROUND INFORMATION 4

SECTION V SPECIFIC INSTRUCTIONS AND PROPOSAL TIMING 6

SECTION VI CURRENT PROGRAM AND PROPOSED MODIFICATIONS 9

SECTION VII REQUIRED BID FORMS 13

A. PLAN REQUIREMENTS

B. CONTRACT REQUIREMENTS

C. FINANCIAL REQUIREMENTS

D. REPORTING REQUIREMENTS

E. OPERATIONAL REQUIREMENTS

F. COMMUNICATION REQUIREMENTS

G. AUDIT REQUIREMENTS

H. PERFORMANCE GUARANTEES

I. QUESTIONNAIRE

· GRIDS

· SHORT ANSWERS

· ESSAY QUESTIONS

J. COST PROPOSAL

SUPPLEMENTAL INFORMATION (AVAILABLE BY SECURE EMAIL UPON REQUEST TO ARTHUR J. GALLAGHER)

A. CENSUS DATA

B. POLICY AND AMENDMENT

C. PREMIUM AND LIVES

D. DETAILED CLAIMS LISTING

E. TRI-FOLD BROCHURE (DISTRIBUTED AT BENEFIT FAIRS)

F. SUMMARY PLAN DESCRIPTION/CERTIFICATE OF COVERAGE

G. RATE HISTORY

H. APPEALS REPORTS

I. SOCIAL SECURITY APPROVALS

NOTICE TO LONG-TERM DISABILITY CARRIERS

AND OTHER INTERESTED PARTIES

This is an announcement only. The Group Insurance Commission (GIC) of the Commonwealth of Massachusetts intends to post a Bid for an insurance carrier for its long-term disability (LTD) benefit, and to require online Quote submission via COMMBUYS. Please do not contact the Purchaser with questions about the anticipated Bid. Bidders are solely responsible for monitoring this site for amendments to this announcement, if any, and for the complete Bid posting, if any. Bidders may monitor the site through publicly accessible search and browse tools, or through COMMBUYS email notification and record tracking tools by ensuring the commodity codes associated with this record are included in the commodity codes section of their COMMBUYS profile. Bidders may elect to subscribe to COMMBUYS immediately or wait until they have reviewed the complete Bid posting including the RFR and its attachments, if any. Bidders who elect to establish a COMMBUYS account must select the Register link on www.commbuys.com and complete the online subscription process. Bidders for this RFR should include the Commodity-EPP code 84-13-16-04 in their COMMBUYS profile.

The GIC was established by the legislature in 1955 to provide and administer health insurance and other benefits to the Commonwealth’s employees and retirees, and their dependents and survivors. The GIC also covers housing and redevelopment authorities’ personnel, participating municipalities, and retired municipal employees and teachers in governmental units. The GIC is a quasi-independent state agency governed by a seventeen-member Commission appointed by the Governor. Commission members encompass a range of interests and expertise including labor and retirees, the public interest, the administration, and health economics. Currently, over 240,000 enrollees and 430,000 people have GIC coverage.

The GIC is responsible for negotiating, contracting, and administering group long-term disability coverage for over 40,000 state employees. The Commission’s current LTD benefit design pays 55 percent of salary, up to a monthly maximum of $10,000, after a 90-day elimination period. The program is voluntary and is fully funded by enrollees. The Commonwealth makes no contribution toward the premium. LTD participants are currently considered disabled if they are unable to perform the material and substantive duties of their regular occupation or if they are working but unable to earn more than 80 percent of their pre-disability earnings due to injury or sickness.

The full text of the Request for Response (RFR) may be obtained via the Internet on or about November 16, 2016 using the Commonwealth’s e-procurement system, COMMBUYS, which is located at www.commbuys.com. The file number for this RFR is Bid BD-17-1049-GIC00-07GIC-10557. It can also be found by searching alternate ID number: GICPND1706. Its title is GICPND1706 Procuring a LTD Insurance Carrier for the Group Insurance Commission. Questions regarding the RFR should be directed to Catherine Moore at the Group Insurance Commission, at (617)727-2310 x7033. The RFR will state the schedule and definitive due date for responses, tentatively set for December 21, 2016 at 12:00 noon.

The GIC reserves the right to reject any or all responses or to accept any proposal or portion thereof, if deemed to be in the best interests of the Commonwealth and its insured.

Roberta Herman, M.D.

Executive Director Group Insurance Commission

SECTION I - GENERAL RFR REQUIREMENTS

In general, most of the required contractual stipulations are referenced in the Standard Contract Form and Instructions and the Commonwealth Terms and Conditions. However, the following RFR provisions must appear in all Commonwealth competitive procurements conducted under 801 CMR 21.00.

The terms of 801 CMR 21.00: Procurement of Commodities and Services are incorporated by reference into this RFR. Words used in this RFR shall have the meanings defined in 801 CMR 21.00. Additional definitions may also be identified in this RFR. Other terms not defined elsewhere in this document may be defined in OSD’s Glossary of Terms. Unless otherwise specified in this RFR, all communications, responses, and documentation must be in English, all measurements must be provided in feet, inches, and pounds and all cost proposals or figures in U.S. currency. All responses must be submitted in accordance with the specific terms of this RFR.

COMMBUYS Market Center. COMMBUYS is the official source of information for this Bid and is publicly accessible at no charge at www.commbuys.com. Information contained in this document and in COMMBUYS, including file attachments, and information contained in the related Bid Questions and Answers (Q&A), are all components of the Bid, as referenced in COMMBUYS, and are incorporated into the Bid and any resulting contract.

Bidders are solely responsible for obtaining all information distributed for this Bid via COMMBUYS. Bid Q&A supports Bidder submission of written questions associated with a Bid and publication of official answers.

It is each Bidder’s responsibility to check COMMBUYS for:

· Any amendments, addenda or modifications to this Bid, and

· Any Bid Q&A records related to this Bid.

The Commonwealth accepts no responsibility and will provide no accommodation to Bidders who submit a Quote based on an out-of-date Bid or on information received from a source other than COMMBUYS.

COMMBUYS Registration. Bidders may elect to obtain a free COMMBUYS Seller registration which provides value-added features, including automated email notification associated with postings and modifications to COMMBUYS records. However, in order to respond to a Bid, Bidders must register and maintain an active COMMBUYS Seller account.

All Bidders submitting a Quote (previously referred to as Response) in response to this Bid (previously referred to as Solicitation) agree that, if awarded a contract: (1) they will maintain an active seller account in COMMBUYS; (2) they will, when directed to do so by the procuring entity, activate and maintain a COMMBUYS-enabled catalog using Commonwealth Commodity Codes; (3) they will comply with all requests by the procuring entity to utilize COMMBUYS for

Section I - General RFR Requirements (continued) the purposes of conducting all aspects of purchasing and invoicing with the Commonwealth, as added functionality for the COMMBUYS system is activated; (4) Bidder understands and acknowledges that all references to the Comm-PASS website or related requirements throughout this RFR, shall be superseded by comparable requirements pertaining to the COMMBUYS website; and (6) in the event the Commonwealth adopts an alternate market center system, successful Bidders will be required to utilize such system, as directed by the procuring entity. Commonwealth Commodity Codes are based on the United Nations Standard Products and Services Code (UNSPSC).

The COMMBUYS system introduces new terminology, which bidders must be familiar with in order to conduct business with the Commonwealth. To view this terminology and to learn more about the COMMBUYS system, please visit the COMMBUYS Resource Center.

Multiple Quotes. Bidders may not submit Multiple Quotes in response to a Bid unless the RFR authorizes them to do so. If a Bidder submits multiple quotes in response to an RFR that does not authorize multiple responses, only the latest dated quote submitted prior to the bid opening date will be evaluated.

Quote Content. Bid specifications for delivery, shipping, billing and payment will prevail over any proposed Bidder terms entered as part of the Quote, unless otherwise specified in the Bid.

Supplier Diversity Program (SDP). Massachusetts Executive Order 565 reaffirmed and expanded the Commonwealth’s policy to promote the award of state contracts in a manner that develops and strengthens certified Minority Business Enterprises (MBEs), Women Business Enterprises (WBEs), Minority and Women Nonprofit Organizations (M/WNPOs), Veteran Business Enterprises (VBEs), Service-Disabled Veteran-Owned Business Enterprises (SDVOBEs), Disability-Owned Business Enterprises (DOBEs), and Lesbian, Gay, Bisexual and Transgender Business Enterprises (LGBTBEs).

Partnerships with M/WBEs, M/WNPOs, VBEs and SDVOBEs: All bidders are required to make a significant financial commitment to partner with certified M/WBEs, M/WNPOs, VBEs and/or SDVOBEs certified or verified by the Supplier Diversity Office (SDO). Bidders must identify a commitment in the form of a specific percentage of sales made under the resulting contract that will be spent with an SDP Partner(s) on a Massachusetts fiscal year basis, using SDP Plan Form #1 – SDP Plan Commitment. This percentage commitment will extend for the life of any resulting contract.

This requirement extends to all bidders regardless of their certification status, and no bidder will be awarded a Contract unless and until the above requirement is met. Bidders may not list themselves or affiliates as SDP Partners. In order to ensure compliance with this section and encourage bidder participation, SDP Plans will be evaluated at 10% or more of the total evaluation score for all for Large Procurements (those with a total value of greater than $150,000). SDP Plan submission is encouraged but not required for Small Procurements (those with a total value equal to or less than $150,000).

Once an SDP commitment is approved, the agency will monitor the Contractor’s performance, and use the Contractor’s reported expenditures with M/WBEs, M/WNPOs, VBEs and SDVOBEs to fulfill their own SDP expenditure benchmarks. The Commonwealth reserves the right to contact SDP Partners at any time to request that they attest to the amounts reported to have been paid to them by the Contractor.

SDP Forms: Unless otherwise specified in the RFR, the following SDP forms are required to be submitted by the deadlines noted below in order to meet the mandatory participation requirements of the SDP:

In addition to the requirements above, all bidders must follow the requirements set forth in the Supplier Diversity Program (SDP) Plan Section of the RFR. During the life of the contract, the Commonwealth reserves the right to expand the range of certified business categories available for SDP partnerships to all those mentioned above and/or request reports on the Contractors’ spending with such certified business categories.

Supplier Diversity Program (SDP) Resources:

· Lists of M/WBEs, M/WNPOs, VBEs, SDVOBEs, DOBEs and LGBTBEs certified or verified by the Supplier Diversity Office (SDO) are located at www.mass.gov/sdo.

· Resources to assist Prime Bidders in finding potential Certified Partners can be found at www.mass.gov/sdp.

· The Operational Services Division offers trainings on compliance with the SDP Plan requirements. Registration information for upcoming trainings can be found on the Supplier Diversity Program Trainings webpage.

Best Value Selection and Negotiation. The Strategic Sourcing Team or SST may select the response(s) which demonstrates the best value overall, including proposed alternatives that will achieve the procurement goals of the department. The SST and a selected bidder, or a contractor, may negotiate a change in any element of contract performance or cost identified in the original

RFR or the selected bidder’s or contractor’s response which results in lower costs or a more cost effective or better value than was presented in the selected bidder’s or contractor’s original response.

Bidder Communication. Bidders are prohibited from communicating directly with any employee of the procuring department or any member of the SST regarding this RFR except as specified in this RFR, and no other individual Commonwealth employee or representative is authorized to provide any information or respond to any question or inquiry concerning this RFR. Bidders may contact the contact person for this RFR in the event this RFR is incomplete or the bidder is having trouble obtaining any required attachments electronically through COMMBUYS.

Contract Expansion. If additional funds become available during the contract duration period, the department reserves the right to increase the maximum obligation to some or all contracts executed as a result of this RFR or to execute contracts with contractors not funded in the initial selection process, subject to available funding, satisfactory contract performance and service or commodity need.

Costs. Costs which are not specifically identified in the bidder’s response, and accepted by a department as part of a contract, will not be compensated under any contract awarded pursuant to this RFR. The Commonwealth will not be responsible for any costs or expenses incurred by bidders responding to this RFR.

Electronic Communication/Update of Bidder’s/Contractor’s Contact Information. It is the responsibility of the prospective bidder and awarded contractor to keep current on COMMBUYS the email address of the bidder’s contact person and prospective contract manager, if awarded a contract, and to monitor that email inbox for communications from the SST, including requests for clarification. The SST and the Commonwealth assume no responsibility if a prospective bidder’s/awarded contractor’s designated email address is not current, or if technical problems, including those with the prospective bidder’s/awarded contractor’s computer, network or internet service provider (ISP) cause email communications sent to/from the prospective bidder/awarded contractor and the SST to be lost or rejected by any means including email or spam filtering.

Electronic Funds Transfer (EFT). All bidders responding to this RFR must agree to participate in the Commonwealth Electronic Funds Transfer (EFT) program for receiving payments, unless the bidder can provide compelling proof that it would be unduly burdensome. EFT is a benefit to both contractors and the Commonwealth because it ensures fast, safe and reliable payment directly to contractors and saves both parties the cost of processing checks. Contractors are able to track and verify payments made electronically through the Comptroller’s Vendor Web system. A link to the EFT application can be found on the OSD Forms page (www.mass.gov/osd). Additional information about EFT is available on the VendorWeb site (www.mass.gov/osc). Click on MASSfinance.

Successful bidders, upon notification of contract award, will be required to enroll in EFT as a contract requirement by completing and submitting the Authorization for Electronic Funds Payment Form to this department for review, approval and forwarding to the Office of the Comptroller. If the bidder is already enrolled in the program, it may so indicate in its response. Because the Authorization for Electronic Funds Payment Form contains banking information, this form, and all information contained on this form, shall not be considered a public record and shall not be subject to public disclosure through a public records request.

The requirement to use EFT may be waived by the SST on a case-by-case basis if participation in the program would be unduly burdensome on the bidder. If a bidder is claiming that this requirement is a hardship or unduly burdensome, the specific reason must be documented in its response. The SST will consider such requests on a case-by-case basis and communicate the findings with the bidder.

HIPAA: Business Associate Contractual Obligations. Bidders are notified that any department meeting the definition of a Covered Entity under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) will include in the RFR and resulting contract sufficient language establishing the successful bidder’s contractual obligations, if any, that the department will require in order for the department to comply with HIPAA and the privacy and security regulations promulgated thereunder (45 CFR Parts 160, 162, and 164) (the Privacy and Security Rules). For example, if the department determines that the successful bidder is a business associate performing functions or activities involving protected health information, as such terms are used in the Privacy and Security Rules, then the department will include in the RFR and resulting contract a sufficient description of business associate’s contractual obligations regarding the privacy and security of the protected health information, as listed in 45 CFR 164.314 and 164.504 (e), including, but not limited to, the bidder's obligation to: implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the protected health information (in whatever form it is maintained or used, including verbal communications); provide individuals access to their records; and strictly limit use and disclosure of the protected health information for only those purposes approved by the department. Further, the department reserves the right to add any requirement during the course of the contract that it determines it must include in the contract in order for the department to comply with the Privacy and Security Rules. Please see other sections of the RFR for any further HIPAA details, if applicable.

Minimum Quote (Bid Response) Duration. Bidders Quotes made in response to this Bid must remain in effect for at least 90 days from the date of quote submission.

Prompt Payment Discounts (PPD). All bidders responding to this procurement must agree to offer discounts through participation in the Commonwealth Prompt Payment Discount (PPD) initiative for receiving early and/or on-time payments, unless the bidder can provide compelling proof that it would be unduly burdensome. PPD benefits both contractors and the Commonwealth.

Contractors benefit by increased, usable cash flow as a result of fast and efficient payments for commodities or services rendered. Participation in the Electronic Funds Transfer initiative further maximizes the benefits with payments directed to designated accounts, thus eliminating the impact of check clearance policies and traditional mail lead time or delays. The Commonwealth benefits because contractors reduce the cost of products and services through the applied discount. Payments that are processed electronically can be tracked and verified through the Comptroller’s Vendor Web system. The PPD form can be found as an attachment for this Bid on COMMBUYS.

Bidders must submit agreeable terms for Prompt Payment Discount using the PPD form within their proposal, unless otherwise specified by the SST. The SST will review, negotiate or reject the offering as deemed in the best interest of the Commonwealth.

The requirement to use PPD offerings may be waived by the SST on a case-by-case basis if participation in the program would be unduly burdensome on the bidder. If a bidder is claiming that this requirement is a hardship or unduly burdensome, the specific reason must be documented in or attached to the PPD form.

Public Records. All responses and information submitted in response to this RFR are subject to the Massachusetts Public Records Law, M.G.L., c. 66, s. 10, and to c. 4, s. 7, ss. 26. Any statements in submitted responses that are inconsistent with these statutes, including marking by bidders of information as confidential during the quote submission process in COMMBUYS, shall be disregarded.

Reasonable Accommodation. Bidders with disabilities or hardships that seek reasonable accommodation, which may include the receipt of RFR information in an alternative format, must communicate such requests in writing to the contact person. Requests for accommodation will be addressed on a case by case basis. A bidder requesting accommodation must submit a written statement which describes the bidder’s disability and the requested accommodation to the contact person for the RFR. The SST reserves the right to reject unreasonable requests.

Restriction on the Use of the Commonwealth Seal. Bidders and contractors are not allowed to display the Commonwealth of Massachusetts Seal in their bid package or subsequent marketing materials if they are awarded a contract because use of the coat of arms and the Great Seal of the Commonwealth for advertising or commercial purposes is prohibited by law.

Subcontracting Policies. Prior approval of the department is required for any subcontracted service of the contract. Contractors are responsible for the satisfactory performance and adequate oversight of its subcontractors. Human and social service subcontractors are also required to meet the same state and federal financial and program reporting requirements and are held to the same reimbursable cost standards as contractors.

Section II – COMMBUYS Documentation

Purchasing Department:

Group Insurance Commission

Email Address:

RFR File Name/Title:

Catherine.Moore@MassMail.state.ma.us

Procuring a LTD Insurance Carrier for the Group Insurance Commission

1. Description or purpose of procurement:

The Group Insurance Commission (GIC) seeks group long-term disability coverage for a subgroup of employees of the Commonwealth.

2. Applicable Procurement Law

Check Appropriate Box (“X”):

Executive Branch Goods and Services

Section II – COMMBUYS Documentation (continued)

3. Identify acquisition method (choose one of the following):

4. Identify whether single or multiple contractors are required for contract(s):

Check One (“X”):

5. Identify whether single or multiple departments will be able to use:

The Purchasing Department reserves the right to add or remove additional authorized users during the contract term.

6. Expected duration of contract:

Initial Duration

3 years

Total Maximum Contract Duration

5 years

Section II – COMMBUYS Documentation (continued)

7. Anticipated expenditures, funding or compensation for expected duration:

Estimated Value of Total Procurement: $50,000,000 over the first three years

· Contract will not have a Maximum Obligation Amount (Rate Contract)

· Contract will not be subject to Quotes by a Pre-Qualified List of Contractors

· Federal Funds will not be Used to Fund Contract(s)

8. Indicate contract performance and business specifications:

See sections IV, VI, and VII of the RFR.

9. Instructions for submissions of responses:

See section V of the RFR.

10. Deadline for responses (or procurement calendar):

· Indicate deadline date: December 21, 2016

· Indicate deadline time: 12:00 noon ET

· Will a Bidders’ Conference be offered? Yes [ X ] No [ ] Will opportunity for written questions be offered? Yes [ X ] No [ ] All questions must be submitted in writing by December 5, 2016 at 12:00 p.m. ET.

All questions about this procurement should be sent to Catherine Moore at the GIC (Catherine.Moore@MassMail.state.ma.us) or to Patrick Haraden at Arthur J. Gallagher (Pat_Haraden@ajg.com).

Questions and answers will be posted on COMMBUYS on or about December 8, 2016.

Please refer to the COMMBUYS website frequently for changes to this schedule.

Section II – COMMBUYS Documentation (continued)

11. RFR Attachments Posted on COMMBUYS (http://www.COMMBUYS.com; Commonwealth Forms) are nine (9) required forms/certifications. Please download, print, and review each of these forms/certifications. None of these nine (9) forms/certifications can be amended. If your organization cannot sign each of the nine required forms/certifications exactly as presented on COMMBUYS, please do not submit a proposal to the GIC.

Bidders must complete, sign, and submit the following two forms with their submission:

1. Supplier Diversity Program, Form 1 SDP Plan Commitment

2. Required State Forms Acknowledgement Form

To complete and sign the form titled Required State Forms Acknowledgement, the bidder must affirm that it has read each of the remaining required forms/certifications (listed below) and that, if selected as the GIC’s LTD vendor, it will complete and sign each of the seven remaining required forms/certifications. These forms/certifications are:

3. Commonwealth Standard Terms and Conditions

4. Commonwealth Standard Contract Form

5. Business Associate Agreement

6. Contractor Authorized Signatory Listing Form

7. Verification of Taxpayer Identification Number and Certification (W-9)

8. Authorization for Electronic Funds Payment

9. Prompt Payment Discount Form ii

Section III – Procurement Checklist

The following checklist outlines each element that must be included in each of your proposals

3) Bid Forms

4) Questionnaire (Bid Form I)

· Grids

5) Attachments to the Technical Proposal

a) Detailed Implementation Work Plan

b) Company Organizational Chart

c) Resumes for Key Personnel

d) Most Recent Annual Report

e) Marketing Materials

f) Standard Management Reports

Section III – Procurement Checklist (continued)

The following checklist outlines each element that must be included in each of your proposals

Note:

You must submit the entire proposal electronically to COMMBUYS, as well as submitting three original unbound technical and cost proposals and five bound technical and cost proposals to the GIC. You must submit one bound technical and cost proposal to AJG. You must also provide one electronic copy of your complete proposal to the GIC and a second electronic copy to AJG.

Section III – Procurement Checklist (continued)

ATTACHMENTS TO THE TECHNICAL PROPOSAL

As clearly marked attachments to your Technical Proposal, provide us with the following materials:

a) Detailed Implementation Work Plan: Assume you are selected by the Commonwealth as their designated LTD carrier on February 6, 2017. Prepare a detailed first year implementation plan.

b) Company Organizational Chart: Provide a current organizational chart for your company.

c) Resumes for Key Personnel: Provide professional resumes for each individual who will play a substantial role in managing the GIC account.

d) Most Recent Annual Report: Provide a copy of your most recent corporate annual report and parent company, if applicable.

e) Marketing Materials: Include the LTD marketing materials that you prepared for two recent clients. We are particularly interested in reviewing marketing materials used for large public sector accounts.

f) Standard Management Reports: Provide a packet of your standard LTD management reports.

g) Copy of the Formal Appeals Process: Provide the documentation outlining how a participant can appeal a claims decision.

h) Copies of Forms and Correspondence: Provide copies of your evidence of insurability forms, claim submission materials and standard correspondence with claimants and disability determination forms. Also, please provide any on line options for EOI submission and participant claim status tracking.

Section IV – Background Information

The Group Insurance Commission (GIC) is a quasi-independent state agency governed by a 17-member body appointed by the Governor. The Commission is comprised of union, retiree and public members, a health economist and two ex-officio members, the Commissioner of Insurance and the Secretary of Administration and Finance. The Commission is located administratively within the Executive Office for Administration and Finance.

The GIC is responsible for providing health insurance and other benefits to the employees, retirees and their survivors and dependents of the Commonwealth, certain municipalities, and certain other entities (such as local housing and redevelopment authorities). The GIC designs, implements and manages employee and retiree benefit plans; negotiates plan rates; and continually evaluates the nature, scope and costs of its programs. The GIC designs its benefit programs within parameters set by the Commission and the Legislature. In addition to health insurance, the GIC also sponsors life insurance; LTD insurance; a dental/vision plan for non-union employees; retiree dental and discount vision plans; and pre-tax health care spending account and dependent care assistance programs.

The Commission is responsible for negotiating, contracting, and administering a group LTD program for the active employees of the Commonwealth (employees of the municipal entities covered by the Commission are not eligible for this benefit). Approximately 41,000 employees are currently enrolled in the Commonwealth’s LTD program, which is administered by Unum. The Commission’s LTD benefit design pays up to 55 percent of salary tax-free, to a monthly maximum of $10,000, after a 90-day elimination period. LTD participants are considered disabled if they are unable to perform the material and substantial duties of their regular occupation or if they are working but unable to earn more than 80% of their pre-disability earnings due to injury or sickness. The program is voluntary and is 100% funded by participants. The Commonwealth makes no contribution towards the premium or the administration of this program.

For all GIC benefits and services, the GIC Coordinators are responsible for educating agency employees about the various benefits offered, walking them through the enrollment process, and entering the participants’ benefit enrollment and deductions into their payroll system. There are over 650 agency-level GIC Coordinators. The Commonwealth has multiple payroll systems (approximately 250), which can be grouped into three broad categories:

· HR/CMS, which is a PeopleSoft platform, runs bi-weekly payrolls for the majority of state employees.

· The University of Massachusetts’ (UMass) five (5) campuses maintain their own bi-weekly payroll system to pay employees and students at the five locations across the Commonwealth.

Section IV – Background Information (continued)

· The remaining payroll systems, known as off-line agencies, do not participate in HR/CMS and each control their own payroll systems.

Bidders will have to coordinate premium billing only with the GIC, not with each payroll system. Bidders will have to coordinate verifications of employment, salary history and other employment information that may be required duding the claim process directly from the agency in which the employee works.

Only one benefit change has been made during the current contract period with Unum (July 1, 2012 – June 30, 2017). Effective July 1, 2014 the GIC’s mental/nervous benefit increased from 24 months to 36 months with a 2.5% increase to members’ monthly premiums.

There are also two other features the successful bidder must agree to duplicate:

The current carrier has approved up to six (6) UMass Medical employees working in Liberia to be eligible to participate in the LTD program

There are approximately 1,000 participants in a State Optional Retirement Plan (ORP) for higher education employees that includes a long term disability benefit. If they choose to opt out of the ORP and join the state retirement system, EOI is waived.

Since the GIC’s contract with the current carrier will end on June 30, 2017, the GIC will need to select a carrier to provide its LTD benefit for the period from July 1, 2017 through at least June 30, 2020. Historically, the GIC has also used the procurement to evaluate its benefit design and to make changes, if necessary. All current LTD subscribers would transfer to the new carrier effective July 1, 2017. The GIC may conduct an open enrollment during the first 24 months of the contract.

Section V – Specific Instructions and Proposal Timing

1. All proposals must be based upon the specifications, premium and claims experience, and employee demographic information contained in this RFR.

2. Only representations made in your organization's proposal, finalist presentation and reference check feedback (should you be selected as a finalist), and Best and Final offer response will be considered in the final carrier selection decision.

3. Proposal Deadline: All proposals must be electronically submitted to COMMBUYS and three (3) original unbound proposals (signed in blue ink), five (5) bound copies of your proposal, and one CD must reach the 4th floor offices of the GIC (deliveries made to any other floor will not be accepted) no later than Wednesday, December 21, 2016 at 12:00 noon, EST at the address below:

Catherine Moore Budget and Research Director Group Insurance Commission 19 Staniford Street, 4th Floor P.O. Box 8747 Boston, MA 02114-8747

One copy of your proposal and one CD must reach AJG no later than Wednesday, December 21, 2016 at noon, EST at the address below:

Patrick Haraden

Area President

Arthur J. Gallagher

116 Huntington Avenue

Boston, MA 02116

4. Effective Date of Contract: July 1, 2017

5. Rate Guarantee Period: Minimum of three years commencing July 1, 2017 and ending June 30, 2020. The contract will allow the GIC to renew for two additional plan years.

6. Plan Anniversary: July 1, each year (for accounting purposes or rate/benefit changes)

7. Contract Duration: Up to five years

8. Bidders Conference: A bidder’s conference will be held at the offices of the GIC, 19 Staniford Street, 4th Floor, Boston, MA on Tuesday, November 29, 2016 at 1:00 P.M. EST to respond to inquiries regarding the Commonwealth's LTD coverage and the related bidding process.

Section V – Specific Instructions and Proposal Timing (continued)

All answers to inquiries concerning the program and the bidding process raised at the bidders conference and subsequent question period will be posted to COMMBUYS no later than Thursday, December 8, 2016.

9. Written Inquiries: All inquiries concerning coverages and the bidding process must be raised at the bidder’s conference or made in writing to the GIC or AJG by December 5, 2016. The answers to these questions will be posted to COMMBUYS by December 8, 2016. No questions will be entertained after December 5, 2016 at 12:00 noon Eastern Time.

10. Finalist Interviews: The GIC will interview a group of carriers designated as finalists. AJG will contact designated finalists on or about January 9, 2017. The GIC will conduct interviews from January 17 – 20, 2017.

11. Best and Final Offers: The GIC may request best and final offers from finalists, based upon any questions that arise in the course of reviewing bids and the interview process.

12. Sample Communication Materials: All finalists will be asked to prepare sample GIC-specific communication materials and present these materials at the finalist interview.

13. Principal Carrier Contact: Please include in your transmittal letter the name, address, telephone number, fax number and email address of the person at your organization who has overall responsibility for your proposal and who may be reached for questions or requests for additional information regarding your proposal. It is expected that the principal contact noted will also be the ongoing primary contact for the GIC for the duration of the contract.

14. GIC and AJG Contacts: Questions concerning this bidding process and RFR content should be submitted, via email, to Catherine Moore at the GIC and Patrick Haraden at AJG. Questions must be submitted no later than December 5, 2016 at 12:00 noon.

15. Declinations: Upon reviewing the RFR, should your organization decide not to proceed with submitting a formal bid, we would appreciate you promptly notifying Pat Haraden of AJG in writing.

16. Single Bids: In the past, the GIC has received more than one bid from a single insurance entity. Prospective insurance company bidders should submit a single bid.

17. Supplemental Information Request: In addition to the instructions and data provided on COMMBUYS, additional census data and supplemental information will be provided to prospective bidders upon request by contacting (via email) AJG at Pat_Haraden@ajg.com.

Schedule for Bidding Process:

· January 11, 2017

Reference checks

Section VI – Current Program and Proposed Modifications

The following is a summary of the current LTD program. Refer to the Supplemental Information for more detail on the current program. The carrier awarded this contract must replicate the in-force plan design, as documented in Bid Form A, Plan Requirements.

GENERAL INFORMATION

1. Insureds: The Commonwealth of Massachusetts, through the Group Insurance Commission (GIC), offers a LTD program for the active employees of the Commonwealth of Massachusetts (employees of the municipal entities covered by the Commission are not eligible for this benefit).

2. Current Program: Active employees are offered a LTD program that is 100% funded by participants. The Commonwealth makes no contribution towards the premium or the administration of this program. The LTD benefit design pays up to 55 percent of salary tax-free, to a monthly maximum of $10,000, after a 90-day elimination period. LTD participants are considered disabled if they are unable to perform the material and substantive duties of their regular occupation or if they are working but unable to earn more than 80% of their pre-disability earnings due to injury or sickness.

· Contract Changes: The current LTD insurance contract, in force with Unum for the five-year period beginning July 1, 2012 and ending June 30, 2017, had one change to the contract effective July 1, 2014. The GIC’s LTD mental/nervous benefit increased from 24 months to 36 months, with a 2.5% increase to members’ monthly premiums.

PROPOSED MODIFICATIONS

The GIC is requesting quotes on the following plan design scenarios:

1. Scenario 1 – Current design

2. Scenario 2 Change the LTD Monthly Benefit to 60% of monthly earnings to a monthly maximum benefit of $10,000 per month and maintain all other current design provisions

3. Scenario 3 – Change the pre –ex to 6/6/12

4. Scenario 4 – Price current design without a catastrophic benefit (e.g., Disability Plus in the current Unum contract)

Section VII – Required Bid Forms Bid Form A – Plan Requirements

Where you are able to match the required plan design provisions, write 'Duplicate.' Where you cannot match a plan design provision, provide a brief summary of the benefit you are able to provide.

(ALTERNATIVE 1)

YOUR PLAN

(ALTERNATIVE 1)

There are some instances in which an employee leaves state service, enrolls in COBRA and later returns to state service. As long as the COBRA premiums are paid in full through the months in which he/she is re-hired, all GIC benefits are reinstated on the first day of the month after the employee is re-hired.

Benefits begin the day after the elimination period is completed.

Bid Form A – Plan Requirements (continued)

Where you are able to match the required plan design provisions, write 'Duplicate.' Where you cannot match a plan design provision, provide a brief summary of the benefit you are able to provide.

(ALTERNATIVE 1)

YOUR PLAN

(ALTERNATIVE 1)

$100; or 10% of the gross disability payment.

Age 62 Age 63 Age 64 Age 65 Age 66 Age 67 Age 68 Age 69 or older To Age 65 42 months 36 months 30 months 24 months 21 months 18 months 15 months 12 months

No premium payments are required for coverage while the employee is receiving payments under this plan. Premium payment is required while the employee is satisfying the elimination period.

Where you are able to match the required plan design provisions, write 'Duplicate.' Where you cannot match a plan design provision, provide a brief summary of the benefit you are able to provide.

(ALTERNATIVE 1)

YOUR PLAN

(ALTERNATIVE 1)

Definition of Monthly Earnings

Monthly earnings means the monthly wage or salary that the employee was receiving from the Employer on the date of disability. It includes:

1. Employee contributions made through a salary reduction agreement with the Employer to an IRC Section 401(k), 403(b), 501(c)(3), 457 deferred compensation plan, or any other qualified or non-qualified employee Retirement Plan or deferred compensation arrangement; and

2. Amounts contributed to fringe benefits according to a salary reduction arrangement under an IRC Section 125 plan.

It does not include commissions, bonuses, overtime pay, shift differential, or retroactive salary adjustments while receiving disability benefits under this plan or the Employer's contribution on the employee’s behalf to a retirement plan or deferred compensation arrangement, or any other extra compensation.

Indexed Monthly Earnings

Monthly earnings adjusted on each anniversary of benefit payments by the lesser of 10% or the current annual percentage increase in the Consumer Price Index.

Where you are able to match the required plan design provisions, write 'Duplicate.' Where you cannot match a plan design provision, provide a brief summary of the benefit you are able to provide.

(ALTERNATIVE 1)

YOUR PLAN

(ALTERNATIVE 1)

After 24 months of disability payments, the employee is disabled when, due to the same sickness or injury, the employee is unable to perform the duties of any gainful occupation for which the employee is reasonably fitted by education, training or experience.

· Active participation in a riot

· Loss of a professional license, occupational license or certification

· Attempt to commit or commission of a crime

· Commission of a crime for which the employee has been convicted

· Pre-existing condition

The plan will not cover a disability due to war, declared or undeclared, or any act of war.

Unum will not pay a benefit for any period of disability during which the employee is incarcerated if the period of confinement exceeds 30 days.

Where you are able to match the required plan design provisions, write 'Duplicate.' Where you cannot match a plan design provision, provide a brief summary of the benefit you are able to provide.

(ALTERNATIVE 1)

YOUR PLAN

(ALTERNATIVE 1)

If the employee is admitted for participation in a partial or day treatment program in a hospital or institution licensed to provide care and treatment for a mental illness due to a psychiatric or psychological condition for at least 5 hours per day and at least 4 days per week.

If the employee is confined to a hospital or institution licensed to provide care and treatment for a mental illness due to a psychiatric or psychological condition.

The lifetime cumulative maximum benefit period for all disabilities due to substance abuse or dependency is 24 months.

The limitation does not apply if mental illness is a result of stroke, trauma, viral infection, Alzheimer’s disease or other conditions not listed which are not usually treated by a mental health provider or other qualified provider using psychotherapy, psychotropic drugs, or other similar methods of treatment.

Where you are able to match the required plan design provisions, write 'Duplicate.' Where you cannot match a plan design provision, provide a brief summary of the benefit you are able to provide.

(ALTERNATIVE 1)

Y…