Inquiries and Answers for RFP AABA 2027-0042.pdf

DPA Solicitation #:

RFP AABA 2027*0042

Short-Term and Long-Term Disability

INQUIRIES AND ANSWERS

Question 1: Please explain the reason(s) that this RFP is out to the market.

Answer 1: The State is required to publicly solicit work on an every five year basis.

Question 2: Have the employer contributions changed within the last 60 months?

Answer 2: No. The Short Term Disability (STD) premium remains 100% employer paid. The

Long Term Disability (LTD) premium remains 100% employee paid.

Question 3: Does the customer currently partner with or have plans to partner with a third-party entity that will assist in their benefit administration? Please include the name(s) of the entity partner(s) being considered and explain the scope of services they will provide.

Answer 3: No. The state does not currently partner with a third-party entity that will assist with benefit administration, however, the state may consider it in the future. The state’s organizational structure is such that the Department of Personnel and Administration, Division of Human

Resources, provides guidance and overall benefits administration for the 62 individual departments. The departments have been delegated authority for benefits administration and support at the employee level, coordinating benefits and leave for individual cases, and responding to carrier inquiries (e.g., employment status, last day worked, payroll records, etc.).

Question 4: Please confirm the customer is able to send an eligibility file.

Answer 4: Census information has been provided to all Offerors who have completed the necessary non-disclosure form.

Question 5: Can you please provide a copy of your current performance guarantees?

Answer 5: Please see the additional attachment that has been posted titled: STD-LTD PGs.pdf.

Question 6: Please provide a census file that includes the run date as well as the following key information:

• Gender

• Work Zip Code

• State of Residence

• Date of Birth

• Annual Salary

• Job Title

• LTD Participant Indicator

• Descriptions of abbreviations in any of the provided fields (such as "Status", "Coverage

Option", etc.)

Answer 6: Offerors who have completed the NDA will be provided data files that include the necessary data elements to assess the state’s population and utilization. This information is available by emailing phil.rollins@state.co.us and completing an NDA.

Question 7: If foreign nationals are covered:

• Foreign national category - expatriate, local national, or third country national

• Country of assignment

• Length of assignment

• Payroll type - US or locally based

Answer 7: The current plan documents require employment in the United States with the State of Colorado, additionally, there are no State members with a primary or secondary address outside of the US.

Question 8: What are the current rates for each plan?

Answer 8: Please visit https://dhr.colorado.gov/benefit-premium-rates

Question 9: Are the prior years' rates (rate history) available? Are the renewal rates available?

Answer 9: Please visit https://dhr.colorado.gov/state-employees/state-employee-benefits/previous-plan-years

Question 10: In the STD experience it appears there was a substantial rate decrease for STD starting 7/1/2025. Please provide clarity on why that took place.

Answer 10: The number of compensable short term disability claims was reduced by nearly 40% in 2024 from 2022 due to the implementation of the Colorado Family and Medical Leave

Insurance (FAMLI) program on January 1, 2024.

Question 11: What is the current commission level included in the rates?

Answer 11: There are no commissions currently included. Our contracts with our insurance brokers do not allow commissions.

Question 12: What level of commissions should be included in the proposed rates?

Answer 12: No commissions should be included in your quote. Our contracts with our insurance brokers do not allow commissions.

Question 13: Are there are any pass-through or explicit administrative charges included in the current and historical rates?

Answer 13: The premium rates are all inclusive of costs for claims, administration, etc.

Question 14: Is a recent billing invoice available including the lives and current rates?

Answer 14: No. The state self-bills the disability products.

Question 15: For LTD, do employees pay premiums on a pre-tax or post-tax basis?

https://dhr.colorado.gov/benefit-premium-rates https://dhr.colorado.gov/state-employees/state-employee-benefits/previous-plan-years

Answer 15: Post-tax.

Question 16: Does the State of CO expect to pay premiums within a 30 day grace period?

Answer 16: No. It takes at least 45 to 50 days to process premiums. As noted in Answer 3, the

State has 62 individual departments and 11 institutions of higher education. The State needs to wait until all payrolls for the month are completed before processing the self billed premiums. As a result, premiums are paid toward the middle or end of the following month. For example, July premiums are not paid until August 15th to 20th.

Question 17: Last 5 years of premium and claims experience broken out by class/plan as needed:

• Premium

• Average Monthly Volume

• Average Monthly Lives – Eligible and Enrolled

• Monthly Rates or Administrative Fees

• Claims Paid

• Claim Count

Answer 17: Offerors who have completed the necessary non-disclosure will be provided data files that included closed claims, open claims, and premium/claim monthly details. All detailed claim files include data of disability, beginning date of payment, approval data, RTW, LTD vs

STD, etc. The monthly disability claims file (with premium and claims) is based on paid claims for STD and LTD in each corresponding month.

Question 18: Were there any plan changes during the experience period?

Answer 18: Effective July 1, 2025, the short term disability maximum benefit period was changed. Previously, the maximum benefit period was 150 days for any one period of disability, and a 150 day maximum in a rolling 12 month period for all periods of disability during the 12 month period. Beginning July 1, 2025 the maximum benefit period is 22 weeks for any one period of disability, and no maximum within a rolling 12 month period. This change allows for multiple claims totaling more than 22 weeks in any 12 month period.

Regarding LTD, effective July 1, 2021, the required minimum number of hours for long term disability eligibility was reduced from 30 hours per week to 12 hours per week. Open Enrollment for the FY 2022-23 plan year, effective July 1, 2022, afforded employees an opportunity to enroll in LTD without going through the underwriting process, as long as the employee had not previously been denied coverage.

Question 19: Were there any changes in rates?

Answer 19: Effective July 1, 2021 the LTD plan experienced a 16% rate reduction. Effective

7/1/2025, the STD plan experienced a >50% rate reduction. Please visit https://dhr.colorado.gov/state-employees/state-employee-benefits/previous-plan-years for LTD details. For details about the employer-paid LTD rates please visit 2026-2027, 2025-2026, and

2024-2025.

Question 20: How long has the coverage been with the current carrier? What was the original effective date of the plan?

Answer 20: State contracts are one year long with up to four renewal options. Our initial contract with the incumbent began 7/1/2015.

Question 21: Please clarify whether the data you will be providing is based on a paid or incurred basis.

Answer 21: Offerors who have completed the necessary non-disclosure will be provided data claim files include data of disability, beginning date of payment, approval data, RTW, LTD vs

Question 22: STD claims list over the past 5 years showing date of disability, date of birth, gender, gross benefit, net benefit, termination date, class/plan indicator and total paid.

Answer 22: Offerors have been provided 3 years of data on the disability products, which should be enough data to process rates for this RFP. Providing additional historical data may also not be an accurate representation of the State’s STD utilization due the State FAMLI which went live

1/1/2024.

Question 23: Last 5 years of premium and claims experience broken out by class/plan as needed:

• Premium

• Average Monthly Volume

• Average Monthly Lives – Eligible and Enrolled

• Monthly Rates or Administrative Fees

• Claims Paid

Answer 23: Offerors who have completed the necessary non-disclosure will be provided data claim files include data of disability, beginning date of payment, approval data, RTW, LTD vs

Question 24: Do the claims paid figures include any loads or other items in addition to what was paid to claimants? If so, please describe what is added on top of the claim paid.

Answer 24: No these reports only include payments made for the disability payments.

Question 25: Claim Counts https://osc.colorado.gov/financial-operations/central-payroll/ppug-rates-fiscal-year-fy-2026-2027 https://osc.colorado.gov/financial-operations/central-payroll/ppug-rates-fiscal-year-fy-2025-2026 https://osc.colorado.gov/financial-operations/central-payroll/ppug-rates-fiscal-year-fy-2024-2025

Answer 25: Offerors who have completed the necessary non-disclosure will be provided data claim files include data of disability, beginning date of payment, approval data, RTW, LTD vs

Question 26: Industry Standard Paid and Incurred (P&I) Analysis and Exhibit

Answer 26: Offerors have been provided data files that include claims that are open and closed, as well as, information on data the benefit began, duration, RTW expectation, etc. This information should suffice to allow for Offerors to assess the risk associated with the State’s

STD and LTD programs.

Question 27: How long has the coverage been with the current carrier? What was the original effective date of the plan?

Answer 27: State contracts are one year long with up to four renewal options. Our initial contract with the incumbent began 7/1/2015.

Question 28: Open and Closed detailed claim listing for the experience period that includes the following:

• Date of Disability

• Benefit Start Date

• Termination Date

• Date of Birth or Age at Disability

• Gender

• Monthly Gross Benefit

• Monthly Net Benefit

• Accumulated Benefits Paid

• Social Security Status

• Claim Status (active, terminated, pending, etc.)

• Reserve For Each Open Claim

• PERS/STRS offset amounts for each claim (if applicable)

Answer 28: An open and closed claims file has been provided to Offerors who have completed the necessary NDA. This file includes all available information on the open and closed claims.