RFP Number OPM049-08-R-0002 - Questions and Answers.doc

U.S. OFFICE OF PERSONNEL MANAGEMENT

FEDERAL LONG TERM CARE INSURANCE PROGRAM

RFP NUMBER OPM049-08-R-0002

QUESTIONS AND ANSWERS

Funding Mechanism

1. Question: Page 3, Section C.1.(B).1 – What is the expected annual OPM administrative expense to be reimbursed from the Experience Fund?

Answer: For pricing purposes you should assume annual OPM administrative expenses of $1 million.

Profile of Employees and Retirees

1. Question: Page 4, Section C.1.(D) – Will you provide historical experience on lapse, mortality and morbidity?

Answer: Additional historical data is being provided in a revised Attachment 3A, which is included in Amendment Number 0001 of the RFP.

You should use caution in drawing any long term inferences from our experience to date, as we are still in the early policy durations and we expect that our experience includes significant beneficial effects of underwriting. Eligible applicants have consisted of actively at work employees and their spouses subject to limited underwriting, plus retirees and others subject to full underwriting.

Communication Vehicles

1. Question: Page 5, Section C.1.E – “However, there is no eligibility file and no opportunity to receive home or email addresses.” There is later mention of an Open Season contiguous with the annual Fall enrollment. Will the FLTCIP be able to distribute communications using the same distribution as the BENEFEDS benefits?

Answer: We anticipate that FLTCIP communications can be distributed through the same channels as other Federal benefits.

2. Question: Attachment 4 - Will the Contractor have access to FEDVIP and FSAFEDS enrollee emails that are not already enrolled in FLTCIP for marketing purposes? If not, will BENEFEDS send marketing emails on behalf of FLTCIP?

Answer: We anticipate that OPM-approved FLTCIP information can be provided to BENEFEDS to be sent by email to FEDVIP and FSAFEDS enrollees. When enrolling via BENEFEDS, individuals agree that they may be contacted about other Federal benefits. BENEFEDS already sends reminder notices to FEDVIP enrollees not already enrolled in FSAFEDS. We think this same method could be used for FLTCIP.

Plan Design

1. Question: Are we correct in assuming that the product design and premium rates need to be approved by OPM only OR are additional approvals required? If so, please specify.

Answer: Yes, you are correct. Our acceptance of an offeror’s proposal constitutes the only approval that is needed.

2. Question: What percentage of enrollees who are married (or in a committed relationship) applied together with their partner for coverage?

Answer: We do not know. FLTCIP applications do not ask for information on marital status.

3. Question: Are you open to linked benefit products being offered as part of a comprehensive Long Term Care portfolio?

Answer: We encourage offerors to propose innovative plan designs and products. With that said, the Long Term Care Security Act authorizes OPM to contract for a policy or policies of long term care insurance. Without knowing the details of what “linked benefits” may be proposed, we cannot determine whether we have the legal authority to contract for them.

4. Question: What discussions, if any, have taken place with the states that have introduced the Partnership Program to ensure that the Federal LTC Program would qualify for Partnership eligibility within those states?

Answer: We have previously sent letters to the states pursuing the Partnership program that indicate our view of how the Federal Program would operate in conjunction with state law. We have attached a copy of this letter (Attachment 10) to Amendment Number 0001 to the RFP for your reference.

5. Question: Page 11, Section C.2.(A).2.m.(2).ii. – If any renewal rates are expected to be inadequate, will you require communication to participants about the inadequacy?

Answer: We will work with the Contractor to develop appropriate communications to current and prospective enrollees.

6. Question: Page 12, Section C.2.A.2.n – Is it OPM's preference that the Contractor make an Alternate Insurance Plan available during the next contract term?

Answer: We are reserving final judgment until we see what recommendations and proposals we receive from offerors. However, as we state in the RFP, the Contractor must continue to provide coverage under the Alternative Insurance Plan to individuals enrolled as of the Transfer Date.

Financial

1. Question: Please provide Annual Accounting Statements for all years with the details for the experience fund balance.

Answer: The experience fund balance sheets are being provided as attachments (Attachments 11, 12, 13, and 14) to Amendment Number 0001 to the RFP.

2. Question: Are claim reserves incorporated in the ending balance of the experience fund in 2007 as shown in this RFP? If not, what is the balance?

Answer: Please see the experience fund balance sheets, which are provided as attachments (Attachments 11, 12, 12, and 14) to Amendment Number 0001 to the RFP.

3. Question: Who are premium taxes paid to and what is the percentage?

Answer: We do not impose additional taxes beyond those required by your state of domicile.

4. Question: The experience fund exhibit (appendix 3A) does not contain details of other variables (as in Table 11/ Page 92) – We would like to request the specifics.

Answer: Please see the experience fund balance sheets, which are provided as attachments (Attachments 11, 12, 12, and 14) to Amendment Number 0001 to the RFP.

5. Question: In the existing profit structure, are collected premium, performance and asset based payments percentages consistent with those disclosed in the March 2006 GAO report?

Answer: Yes. However, we expect that your profit structure proposal under this RFP may differ significantly from that under the current contract.

6. Question: In order to properly develop plan rates, what cost assumptions should be used for the required monthly fee to BENEFEDS?

Answer: Offerors’ rates should incorporate their own normal costs for the functions that BENEFEDS will perform on their behalf.

7. Question: Can you outline the approval process if, in line with your statement on page 13 (3b), an Insurer proposes to adjust the current premiums for the current enrollees to ensure rate adequacy.

Answer: The approval process consists of our acceptance of an offeror’s response to our RFP. Your proposal should adjust the premiums toward rate adequacy where necessary.

8. Question: Page 13, Section C.2.(C).3.b – Should the list of experience analysis include mortality?

Answer: [This reference may be misstated.] In general, your experience analysis should include mortality.

9. Question: Page 13, Section C.2.(C).3.b – Will OPM allow an insurer to have a sequence of rate increases that produce, in combination, adequate rates, and also limit the initial increase to 25%? For example, renewal rates limited to 25% initially plus a second increase a few years later?

Answer: You must limit your proposed premium increase to 25% for individual Current Enrollees. You may suggest a plan for providing further premium increases; however, such a recommendation would be non-binding and would ultimately be subject to the price redetermination provisions at Clause I.4.

10. Question: Page 13, Section C.2.(C).3.c - Is it acceptable to have inadequate rates for the downgrade plan offer?

Answer: You should propose premiums for Current Enrollees under the assumption that all Current Enrollees maintain their current benefit coverage levels. Specific provisions pertaining to downgrades may be further negotiated after contract award. In general, where proposed premiums for Current Enrollees achieve less than full adequacy due to the 25% increase limit, it is reasonable to expect that some commensurate rate adjustment may be made for downgrades in some cases.

11. Question: Page 14, Section C.2.C.5 - Since the amount of any increase and overall premium stability is impacted by each carrier’s investment strategy, will OPM make any recommendations as to how conservative investment strategies should be, or address their comfort level with regards to such issues as the percentage of fund investment that is comprised of equities, etc.?

Answer: You should propose an investment strategy appropriate to the underlying assets, liabilities and risks of the FLTCIP. Your premium proposal should be priced to moderately adverse conditions according to the NAIC standard for rate adequacy. The premiums for Current Enrollees should be priced according to moderately adverse conditions but limited to a 25% increase for any individual enrollee.

12. Question: Page 15, Section C.2.(C).6.b.(3) – The term “all reserves” in this item does not include the IBNR and claims reserves that have been deducted from the Experience Fund per item a. Also, the term “assets” refers to the Experience Fund after reduction for the items in item a. Is this correct? [Same question applies to I.31.(a).(3).C)] Answer: The Contractor will retain reserves only to the extent that it retains any liabilities associated with such reserves as agreed to by the parties.

13. Question: Are we correct to assume that the contract termination stipulation in Question 6A (page 15 of the RFP), also applies to the current carriers?

Answer: Yes, you are correct.

Underwriting

1. Question: Can OPM clarify the difference between modified guaranteed issue and short form underwriting? Specifically indicate how you would classify the current abbreviated underwriting for employees and spouses?

Answer: We view modified guaranteed issue as a category that is more restrictive (i.e., fewer people will qualify for coverage) than guaranteed issue. Short form underwriting is more restrictive than modified guaranteed issue, though not to the level of full underwriting. Our current abbreviated underwriting is short form.

2. Question: Page 17, Question C.2.(D).4.c – In the original FLTCIP request for proposals, it was stated that “The Federal Government employs a high percentage of persons with self-reported disabilities (about 7% of the workforce.)” Can you reconcile that statistic with the 1% active disabled rate referenced here?

Answer: Those two sources of information came from different data sets and are not necessarily inconsistent since they are reporting different things. Both categories include people with disabilities or conditions that are not relevant to long term care (e.g., hearing loss). However, we wanted to make sure offerors know that there are persons that might have conditions that would be relevant to long term care underwriting and going back and analyzing the details reported in those statistics might give some feel for that.

Administration and Systems

1. Question: The RFP indicates that the contractor will be utilizing BENEFEDS for all billing functions. Will OPM be providing an estimate of the BENEFEDS expense structure and will these numbers be guaranteed for the contract period?

Answer: At this time, we are unable to provide information about the expense structure that will exist.

2. Question: The RFP also indicates that contractor will pay BENEFEDS a monthly fee. Can you please clarify this fee?

Answer: BENEFEDS will receive an amount each month for its services, which will be funded through premiums. The amount of the monthly fee is not determined at this time.

3. Question: How will the BENEFEDS start up costs for LTCP billing and possibly enrollment be funded? Will OPM be providing a cost estimate?

Answer: Allowable start-up costs will be reimbursed from the Experience Fund. We do not have a cost estimate at this time.

4. Question: Will the contractor receive the full gross premium from BENEFEDS and receive a subsequent monthly bill for the applicable BENEFEDS fees or will BENEFEDS subtract their fee before transmitting the premium funds to BENEFEDS?

Answer: We anticipate that BENEFEDS will most likely subtract its fee before transmitting the net premium funds to the Contractor to avoid a billing expense. This will be finalized prior to implementation.

5. Question: Regarding the following statement - “We do not expect to initially use BENEFEDS in the FLTCIP application/enrollment process, but we reserve the right during the contract term to incorporate BENEFEDS into this process.”

- How will the integration of FLTCIP with BENEFEDS be communicated to the carrier?

Answer: We will make our intentions known to the Contractor in writing.

- What is OPM’s projection for when this will occur?

Answer: We have no timetable to share at this time.

- If / when this does occur, does OPM anticipate that only online enrollments will be handled by BENEFEDS?

Answer: We have not determined this. Any incorporation of BENEFEDS into the application process will take into account that applications have to pass through the Contractor’s underwriting process.

- Will the FLTCIP carrier be able to reserve the right to maintain their own product website for the FLTCIP?

Answer: The Contractor will maintain its own FLTCIP website.

- What will the carrier’s role be in determining the FLTCIP’s move to BENEFEDS?

Answer: We will consult and work closely with the Contractor in making this determination.

- What is the number of Federal Family members enrolled through the BENEFEDS portal?

Answer: There are more than 1 million FEDVIP enrollments covering about 770,000 enrollees and 1.6 million lives.

- How many of these are already enrolled in the FLTCIP?

Answer: As of January 2008, approximately 33,300 are enrolled in both FEDVIP and FLTCIP; 20,100 are enrolled in both FSAFEDS and FLTCIP; and 7,800 are enrolled in FEDVIP, FSAFEDS, and FLTCIP.

- Will the carrier be included in the BENEFEDS process for all FLTCIP related items, in terms of review (website, correspondence), sign-off, etc?

Answer: OPM has final authority to approve all BENEFEDS products and correspondence. The Contractor may be consulted, depending on the item, but will not have final sign-off authority.

- What will the carrier’s role be in any BENEFEDS web implementation specific to the FLTCIP?

Answer: The Contractor will have an advisory role.

6. Question: In the past OPM has developed strategic goals that have impacted FLTCIP development priorities. Does OPM have additional strategic goals that it may envision for the FLTCIP over the next contract period?

Answer: There are no additional strategic goals at this time beyond what has already been announced. See http://www.opm.gov/strategicplan for current strategic goals.

7. Question: Page 19, Section F.5 – On page 19, #5 it reads “The functions BENEFEDS performs on your behalf should be included in your premium rate development.”

Just to clarify we interpret the above statement to mean you want the bidder to account for all expenses in the submitted premium including the expenses for the functions BENEFEDS will perform on our behalf. Is this a correct assumption?

Answer: Yes, this is correct.

8. Question: Page 18, Section C.2.F.2 – In the past OPM has developed strategic goals that have impacted FLTCIP web development and priorities. Does OPM have additional strategic goals that it may envision for the FLTCIP web that it would be willing to share at this time?

Answer: Please see the answer to question number 6 of this section.

9. Question: Page 19, Section C.2.F.5 – The RFP indicates that “The functions BENEFEDS performs on your behalf should be included in your premium rate development.” It also references the contractor paying BENEFEDS a monthly fee. Absent a BENEFEDS contract with pricing terms, how should the carriers price for this within their proposals?

Answer: Please see the answer to question number 7 of this section.

10. Question: Page 19, Section C.2.F.5 – Will the Contractor have any say in the amount of the BENEFEDS fee, or will that be established by OPM? If the latter, will OPM determine the BENEFEDS fees before the proposal due date?

Answer: The fee will be established by OPM. It is unlikely that fees will be determined before the FLTCIP proposal due date.

11. Question: Page 18, Section C.2.F.2 – What type of claims information must be available on the web site?

Answer: At a minimum, this should include a claims payment history, including the provider, date, and amount of each claim payment, as well as access to the explanation of benefits for each claim. In addition, the claimant should be able to view the amount of the claimant’s Maximum Lifetime Benefit that is remaining, the total number of days in the waiting period, and how many days remain in the waiting period.

12. Question: Page 19, Section C.2.(F).5 - The current BENEFEDS contractor does not do premium administration for the FLTCIP plan. This section implies that a new BENEFEDS contract will be in place with FLTCIP premium administration prior to the transition to a new FLTCIP contractor. Do you agree? What is the anticipated schedule for the BENEFEDS bidding process?

Answer: BENEFEDS will be responsible for FLTCIP premium administration.

Education, Marketing and Enrollment

1. Question: Education, Marketing and Enrollment Question 3 states that we will not have access to employee home addresses or emails. What assistance can OPM and/or the participating agencies provide in support of material dissemination? Would you be open to us providing you with materials for you to mail and/or email to eligible employees?

Answer: Please see Benefits Administration Letter 08-403 for information provided to Agency Benefits Officers on Federal Benefits Open Season information distribution. Information on ordering FLTCIP Open Season material can be included in these instructions. OPM can also issue other BALs or ListServ items providing information on how agencies can order other FLTCIP material, such as New Hire brochures, directly from the Contractor. OPM does not have physical or email addresses for Federal employees and cannot mail items on the Contractor’s behalf.

2. Question: In light of the above, we do assume however that you will provide us with the names and home addresses of current enrollees, in order to ensure proper transition communication? Please confirm.

Answer: The current contractor will provide information on current enrollees to the Contractor. OPM does not maintain this data.

3. Question: Would you be willing to allow us to conduct a segmentation analysis of the eligible population and, based on this analysis provide different materials to different employee segments?

Answer: We are open to this concept. Materials would have to be approved by OPM.

4. Question: Would OPM consider distributing the Federal LTC Program through face-to-face sales opportunities using the existing distribution infrastructure of carriers in addition to the current options of phone and web? This would provide your employees and other eligible family members the choice to become educated and buy long term care insurance in the way most convenient to them.

Answer: You may propose what you believe to be the most effective ways to market the Program. However, the Contractor is prohibited from paying commissions for obtaining completed FLTCIP applications or for approved applications. This prohibition applies to its agents as well. Seminars/educational meetings and other face-to-face opportunities geared towards the eligible population are acceptable when provided by non-commissioned representatives.

5. Question: What is the typical overall volume of new hires per year? What processes and procedures are currently in place for new hires at the majority of the agencies? Is a new hire "kit" provided? What is the common way of communicating benefit options to new employees?

Answer: There are approximately 100,000 new hires per year in the Federal government. This number excludes the United States Postal Service and the uniformed services. Typically, new hires undergo an orientation process, which includes some presentation/discussion of benefit options. This process varies widely from agency to agency and there is no government-wide new hire “kit.” OPM is currently revamping our Insure website to provide more information on insurance benefits for new hires.

6. Question: In your opinion, what was the most effective marketing method used during the last Open Season? What was the least effective method?

Answer: We believe that a wide variety of marketing/educational efforts must be employed. During the last Open Season, efforts such as desk drops, email blasts, newspaper/magazine advertisements, radio ads, meetings, billboards, newsletters, direct mail, and workplace posters were employed.

7. Question: Will the contactor have the ability to market on the BENEFEDS website during the Open Season?

Answer: We expect that the BENEFEDS website would mention the FLTCIP Open Season and provide a link to the Contractor’s website.

8. Question: Will the Contractor have access to FEDVIP and FSAFEDS enrollee emails that are not already enrolled in FLTCIP for marketing purposes? If not, will BENEFEDS send marketing emails on behalf of FLTCIP?

Answer: We anticipate that OPM-approved FLTCIP information can be provided to BENEFEDS to be sent by email to FEDVIP and FSAFEDS enrollees. When enrolling via BENEFEDS, individuals agree that they may be contacted about other Federal benefits. BENEFEDS already sends reminder notices to FEDVIP enrollees not already enrolled in FSAFEDS. We think this same method could be used for FLTCIP.

9. Question: If the FLTCIP Open Season is contiguous with the Annual Fall enrollment, will the FLTCIP be able to distribute communications using the same distribution as the other benefits that are being offered? If so, can you provide more details on this process?

Answer: Yes. Please see Benefits Administration Letter 08-403 for details.

10. Question: Does OPM envision the contractor providing educational meetings for eligible participants as part of Open Season marketing?

Answer: You may propose what you believe to be the most effective ways to market the Program during an Open Season.

11. Question: Can you provide information on the number of new hires per year and the number of people who retire each year?

Answer: Please see the answer to question number 5 of this section for information on new hires. During FY 2006, OPM received and processed more than 100,000 retirement claims.

12. Question: There is mention of newly eligible groups. Are there any plans to add additional groups or classes to the FLTCIP at this time? If so, can you provide an estimate of which groups and their size? Will newly eligible groups be marketed to on a special four week offer period, or the previous eight week period?

Answer: OPM currently has no plans to expand eligibility for the FLTCIP. If groups are added in the future, any decision as to how to reach the newly added group would be negotiated by OPM and the Contractor at that time.

13. Question: The RFP provides data on the size of the eligible population. These numbers differ slightly from other information that is available. Can you provide clarification on the number of eligible civilian, postal and military and by active employee and annuitant/retiree status?

Answer: There may be some differences in the numbers depending on the data source, but the information we have provided in the RFP is adequate for preparing your response.

14. Question: Can OPM provide a geographic distribution of the eligible population?

Answer: We have provided a geographic distribution of Current Enrollees in Attachment 3A of the RFP. It is reasonable to assume a proportional geographic distribution for the eligible population.

15. Question: Page 23, Section C.2.I.3 - There is mention of newly eligible groups. Are there any plans to add additional groups or classes to the FLTCIP at this time? Will newly eligible groups be marketed to on a special four week offer period, or the previous eight week period?

Answer: Please see the answer to question number 12 of this section.

Attachment 5 – Voluntary Benefits Portal – BENEFEDS

1. Question: Attachment 5 - Will the Contractor have access to a website on BENEFEDS to view FLTCIP data?

Answer: We expect that the Contractor will have read-only access to FLTCIP data maintained by BENEFEDS.

2. Question: Attachment 5 – Will the Contractor or BENEFEDS be responsible for mailing protection against unintended lapse (PAUL) letters?

Answer: Our current expectation is that the Contractor will be responsible for mailing these letters, but we are open to negotiating this with the FLTCIP and BENEFEDS contractors.

3. Question: Attachment 5, Section 2, Pages E-4 and E-5 – According to the “FLTCIP Contractor Roles and Responsibilities Matrix” the FLTCIP Contractor’s role seems to be limited for all FLTCIP premium administrative correspondence. What will the carrier’s role, if any, be in reviewing / approving this correspondence?

Answer: OPM will have final authority to approve all correspondence, but we will work with the FLTCIP Contractor to address any concerns.

Attachment 7 – Quality Assurance Surveillance Plan

1. Question: Attachment 7 – The Customer Service Goals indicate that 95% of customer service representatives will be certified as long term care insurance specialists. Does this standard apply to both the sales and service representatives?

Answer: Customer service representatives that deal with the public in a substantive way will have to be certified. CSRs that are performing more clerical functions (such as taking an address change) do not have to be.

2. Question: Attachment 7 – Is it OPM’s intent that the performance standards outlined in the RFP be applicable to Open Season? Would OPM consider different performance standards for Open Season?

Answer: OPM is open to negotiating different standards in call center, underwriting, and website performance for Open Season periods.

3. Question: Attachment 7 – The underwriting performance standard for Second level Reconsiderations is more stringent than the standard for initial reconsiderations. Would OPM consider the same time standard for all reconsiderations? 10 days is a very tight timeframe to get the request reviewed by an underwriter, and then into the hands of the medical director and back for response.

Answer: Reconsiderations are very important to the customer and must be handled expeditiously. We expect that second-level reconsiderations will not be that numerous and believe that the standard as stated is reasonable.

Attachment 8 – Contractor Staffing Change Report

1. Question: Attachment 8 – Does the contractor Staffing Change Report apply to temporary employees?

Answer: Please see Clause H.16 on Page 39. The Contractor Staffing Change Report applies to all staff members who left or were hired under the contract in the past 60 days.

2. Question: Attachment 8 – Does this apply only to LTCP “regular” employees, or temporary staffing, as well?

Answer: Please see the answer to question number 1 of this section.

Contract Clauses

1. Question: Please explain the contractor’s right to terminate the contract at the expiration of a contract term? Is the contractor free to walk away from the contract after any 7 year contract term or must the contractor offer renewal terms for the next contract term?

Answer: OPM has the exclusive right to terminate the contract. The contract expires at the end of the contract term, unless OPM exercises one of the options included in the contract to extend the services provided or extend the contract term.

2. Question: Please explain the contractor’s right to revise rates at the expiration of a contract term? What happens in the event that the contractor and OPM are unable to agree upon renewal rates? What happens if OPM re-bids the contract and is not able to find another contractor willing to assume this business on terms that are more favorable than the current contractor's renewal terms?

Answer: The Contractor does not have the right to revise rates unilaterally at the expiration of the contract term. If OPM chooses to extend the contract, any changes to the rates would be subject to the price redetermination provisions at Clause I.4. If OPM chooses to recompete the contract, it would choose a contractor based on proposals received in response to an RFP. Any rate adjustments proposed by the then-current contractor outside of the RFP process would be irrelevant to the selection of the next contractor.

3. Question: Assuming the contractor is under no obligation to renew its contract with OPM, how would existing FLTCIP enrollees at the time of non-renewal be treated? Will their coverage terminate? If not, and in the absence of a renewal contract, who would determine whether rating adjustments recommended by the current contractor should be implemented?

Answer: The Contractor is obligated to extend the contract with OPM if OPM exercises the option to extend the contract. This option is solely within OPM’s discretion. If OPM chooses not to exercise the option to extend, and the contract expires without a successor contract, then, in accordance with Section 9003 (d)(1) of the Act, the Contractor must continue coverage for existing FLTCIP enrollees at the current rates.

4. Question: If there is a change in contractor after any 7 year contract, who keeps the insureds that are on claim at the time of contract transfer?

Answer: As we state in the RFP, the Contractor will provide coverage to all Current Enrollees, including those on claim, as of the Transfer Date. We will decide how to handle enrollees in any future contract transition at that time.

5. Question: Is OPM asking the contractor to guarantee premium rates for the 7 year term of the OPM contract?

Answer: The premium prices stated in this contract will be fixed unless the Contractor and OPM subsequently agree to a price redetermination as described in Clause I.4. Individual coverage must be guaranteed renewable. The Contractor must regularly monitor FLTCIP experience and propose corrective action whenever experience indicates that it may be needed. Any such action so proposed is subject to approval by OPM.

6. Question: Does OPM expect offerors to submit a copy of their policy and proposed hours for uncompensated overtime in accordance with FAR 52.237-10?

Answer: No, OPM does not expect Offerors to submit a copy of their policy and proposed hours for uncompensated overtime in accordance with FAR Provision 52.237-10. FAR Provision 52.237-10 does not apply to this solicitation and has been deleted in Amendment Number 0001 to the RFP.

7. Question: Page 43, Section I – These questions relate to a situation of the contractor and OPM not reaching agreement on renewal terms.

Can you confirm that the contractor may terminate the contract after any 7 year contract term?

If OPM recompetes the contract and is not able to find another contactor willing to assume this business on terms more favorable than the contractor’s renewal terms, would the contractor’s offered renewal terms govern post-termination? And in the future, what steps would the contractor need to take to adjust rates?

Answer: Please see the answers to question numbers 1, 2, and 3 in this section.

8. Question: Page 44, Section I.6 – Is there a limit on the number of extensions or the length of the extensions that the Government can impose?

Answer: There are three options that pertain to extension and the lengths associated with them. The option to extend services as stated in Clause I.5 cannot exceed 10 months in total. In other words, OPM cannot exercise this option for 10 months, then again for another 10 months. Similarly, the FAR Clause 52.237-3 Continuity of Services, which is incorporated by reference, would also act as a 90-day extension. FAR Clause 52.237-3 Continuity of Services should be used only once. The option to extend the term of the contract is stated in Clause I.6; since the term of the contract is 7 years, exercising this option extends the contract for another 7 year term. We have not limited the number of times this contract may be extended.

9. Question: Page 44, Section I.6 - Sec. I.6 Option To Extend Contract Term, does not specify the term of any contract extension. Can you confirm that this provision is simply setting forth the notice OPM must give the Contractor when OPM seeks to renew for another 7 year contract term (as was explained in Amendment #2 to the 2000 RFP)?

Answer: Please see the answer to question number 8 of this section.

10. Question: Page 54, Section I.23 – Will the BENEFEDS FLTCIP start-up development costs be funded via the experience fund? If yes, do you have a cost estimate?

Answer: Allowable start-up costs will be reimbursed from the Experience Fund. We do not have a cost estimate at this time.

Contract

1. Question: Page 99, Section L.7 – Sec. L.7 refers to a resultant contract. Will the RFP coupled with the winning proposal and insurance and related documents constitute the “master contract” or do you envision entering into a separate agreement?

Answer: The successful offeror’s proposal and the RFP will constitute the master contract. The group policy or policies will be incorporated into the master contract by modification. See Clause I.33, which has been added in Amendment Number 0001 to the RFP.

Price Proposal

1. Question: Please clarify if Table 12A should be for year one only or for the entire contract period.

Answer: Table 12A should be consistent with your projection in Table 11, which is intended primarily for illustration of your cash flow calculations. If you assume the same new enrollment distribution for each year, you need only provide one distribution for Table 12A. You should describe how you scale your Table 12A distribution to your expected number of new issues for each year in Table 11.

Price Evaluation

1. Question: Page 102, Section M.3.3 – The last paragraph has the sentence “Any inconsistency, real or apparent, between promised performance and price must be explained in the proposal.” What is meant by “promised performance”? Can you provide some additional clarification about what this paragraph means?

Answer: Promised performance refers to the services you propose to deliver under this contract at the proposed price.

Past Performance

1. Question: Page 79 – What is meant by Past Performance in this section? It appears to reference everything in the Technical Proposal. Is that OPM’s intent?

Answer: Past performance refers to the offeror’s performance history on previous contracts. We are requesting the past performance information stated in paragraphs a through d.

Operations

1. Question: With respect to the existing LTC Partners infrastructure, we would like to understand the following:

a. Is it OPM’s preference to maintain the current infrastructure as part of the solution regardless of the new carrier?

Answer: OPM is neutral on this issue. It is up to the offeror to propose the infrastructure and arrangements that make the most sense to them.

b. If so, is there any existing agreement between OPM and the two incumbent carriers regarding the transfer of this infrastructure?

Answer: Please see the answer to paragraph (a) of this section.

c. If not, in so far as the Partners infrastructure was solely created to support the Federal program, do you envision it ceasing to exist? Will the existing carriers be responsible for and incur all wind-down costs associated with closing the facility?

Answer: Arrangements concerning that infrastructure are the responsibility of the existing Carriers.

d. Additionally, is there an opportunity to leverage the current infrastructure during the transition period (not to exceed 12 months)?

Answer: The existing FLTCIP contract contains a provision comparable to Clause I.5 of the RFP.

2. Question: We fully support the extensive definition of care coordination services and understand the importance of providing these services not just to the enrollees but to non-enrolled qualified relatives as well. Therefore, we would like to receive clarification whether it is OPM’s intent to provide these services at an additional charge to the non-enrolled relatives OR as a benefit under the coverage of the enrollee?

Answer: We are asking offerors to propose whether they will charge a fee for these services.

3. Question: In order to assess the impact of your request for transitional services to existing claimants, we would like to receive additional details on the following:

a. How many current claimants are there and what duration of claim do you typically experience?

Answer: Additional claims data is being provided in a revised Attachment 3A of the RFP.

b. Please provide an overview of the existing discount or other arrangements that the incumbent carriers provide today to these claimants Answer: Claimants are provided with information on discounted services and products they may receive as a FLTCIP claimant. They are not required to utilize these.

4. Question: Is it OPM’s intention that the pricing of a service package be self sufficient or can it continue to be subsidized?

Answer: We do not have any preconceived ideas about this. We are asking offerors to propose whether to offer a service package and if so, how it should be priced.

General

1. Question: Will there be a mechanism for requesting additional clarification from OPM on the RFP requirements subsequent to this request?

Answer: We will allow a second round of questions. See Amendment Number 0001 to the RFP for the deadline and other information regarding the second round of questions.

2. Question: When will OPM determine if there will be a bidder’s conference and if there is one, what potential dates should we be holding?

Answer: We have decided not to conduct a preproposal conference.

3. Question: Can you confirm that pre-enrollment customer service personnel do not need to hold an insurance agent’s license?

Answer: Yes, that is correct.

4. Question: After releasing its Request for Proposal for the initial contract period, OPM met with interested carriers individually. Is it OPM’s intention to meet with carriers individually this time?

Answer: Please see section M.5 on page 103 of the RFP.

5. Question: To what extent will the experience, to date, of the FLTCIP, for example the Funded Status Reports, be shared with carriers interested in bidding on the program?

Answer: We have provided the historical experience data we consider necessary and sufficient for all offerors to prepare a fully informed response to this RFP.

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