SP-HI-237248_Sources Sought Notice for FSA FEDS.pdf

FSAFEDS SSN #SP-HI-237248

UNITED STATES OFFICE OF PERSONNEL MANAGEMENT

FEDERAL FLEXIBLE SPENDING ACCOUNT PROGRAM SERVICES

SOURCES SOUGHT NOTICE #SP-HI-237248

December 5, 2023

DISCLAIMER:

THE GOVERNMENT DOES NOT INTEND TO AWARD A CONTRACT ON THE BASIS OF THIS RFI OR TO

OTHERWISE PAY FOR THE INFORMATION SOLICITED.

This RFI does not constitute a solicitation for quotes or the authority to enter into negotiations to award a contract. This RFI is for planning purposes only and shall not be considered as a Request For Quote or as an obligation on the part of the Government to acquire any products or services. No entitlement to payment of direct or indirect costs or charges by the Government will arise as a result of contractor submission of responses to this RFI or the Government’s use of such information.

Responses to this RFI will not be returned.

Whatever information is provided in response to this RFI may be used to assess tradeoffs and alternatives available for determining how to proceed in the acquisition. Any proprietary information that is submitted may be used in establishing requirements, but specific contractor-submitted information will be safeguarded as proprietary.

I. Purpose The U.S. Office of Personnel Management (OPM) is seeking to identify qualified small business sources which can provide flexible spending account program services, including claims administration, web services, customer support, and quality assurance for the Federal Flexible Spending Account Program (FSAFEDS) under North American Industry Classification System (NAICS) code 524292, Third Party Administration of Insurance and Pension Funds. This sources sought notice is for market research purposes only and IS NOT A REQUEST FOR PROPOSAL (RFP) nor does it restrict the Government as to its ultimate acquisition approach. The Government will not reimburse respondents for any costs incurred in preparation of a response to this notice.

II. Background OPM is responsible for setting government-wide benefits and human resources policies and providing guidance to agencies, as well as procuring and managing the contractual relationships with carriers for the various benefit programs. Please visit for more information about OPM and the benefits we administer.

One benefit administered by OPM is FSAFEDS, a cafeteria plan authorized by § 125 of the Internal Revenue Code and established in the FSAFEDS plan document (“FedFlex”). FSAFEDS allows eligible employees at participating Federal agencies to enroll in a flexible spending account that uses pre-tax payroll deductions to reimburse their eligible out-of-pocket health care and dependent care expenses. Over 490,000 employees currently participate and save an average of approximately 30% on these expenses.

All Federal benefit programs are administered in accordance with applicable Federal laws and regulations. Responses to this notice must demonstrate an understanding of FSAFEDS’ law and https://www.opm.gov/healthcare-insurance/ https://www.opm.gov/healthcare-insurance/flexible-spending-accounts/reference-materials/fedflex.pdf regulations to ensure compliance.

III. FSAFEDS Program Requirements

A. Claims Administration Key to the administration of this contract would be prompt, accurate claims administration.

The contractor would accept enrollee claims by mail, fax, and online, between two FSAFEDS accounts for spousal claim processing after one of the accounts balances is exhausted, and from insurance carriers submitting claims for their members using a process known as “paperless reimbursement.” The contractor would then process paper claims within five business days and paperless claims within two business days by verifying that the expense is eligible, the necessary documentation is attached, the applicant is an enrollee with a sufficient balance in his or her flexible spending account, and validating that the expense was incurred and filed by the deadlines. Valid claims would be reimbursed through electronic funds transfer or check and confirmed by email to the enrollee. Denied claims, including paperless claims, would be reported to the enrollee by email with the reason for the denial.

An appeal process for denied claims would be established.

FSAFEDS receives the vast majority of its health care claims directly from carriers through paperless reimbursement. The program averages about 2,000,000 health care claims each month, with approximately 8% submitted by participants manually and the rest submitted for participants by carriers using paperless reimbursement. The program also receives about 36,000 dependent care claims each month. All of these dependent care claims are submitted manually. Between January and April, when participants may submit grace period claims from the prior plan year and claims from the current plan year, monthly health care claims can surge up to 2.5 million and dependent care claims can increase up to about 50,000 per month.

Claims administration must be done in compliance with Internal Revenue Service (IRS) guidelines (e.g., IRS Publication 502, available at http://www.irs.gov/publications/p502/index.html), including reviewing letters of medical necessity on applicable claims.

B. Website/Enrollment Portal The contractor will need to build a website to provide services to current and potential FSAFEDS enrollees. The website must be able to support 1.5 million page views each month and accommodate a surge in traffic of up to 10 million page views during the annual Federal Benefits Open Season (4-5 weeks in November/December).

The website would inform visitors about the program, including employee eligibility and eligible expenses. It would also serve as a portal for users to submit their enrollment application. The website would provide printable forms, including claim forms, letter of medical necessity forms, qualifying life event forms, and worksheets to help visitors calculate their eligible expenses. The website would also provide an online calculator that http://www.irs.gov/publications/p502/index.html shows users how much they could put into a flexible spending account and how much they can expect to save on their taxes based on their provided salary, tax, and projected expense information. For current enrollees, the website would allow users to securely view their FSAFEDS account status, including claims history and current account balance, with a username and password. Online account access must require phishing-resistant multi-factor authentication (a social security number may not be one of the factors).

The website would need to be compatible with all major web browsers and with mobile devices and be 508 compliant.

C. Agency Billing and Employee Allotment Reconciliation The contractor would need to work with BENEFEDS, an enrollment and premium portal and reconciliation module administered by a different contractor. The FSAFEDS contractor will need to create and transmit enrollment files each day to BENEFEDS. Upon receipt, BENEFEDS will create new participant accounts, update existing accounts, and reject non-compliant enrollment data. BENEFEDS will send an enrollment error file back to the FSAFEDS administrator and will process compliant data.

BENEFEDS will send a daily update file containing changes made to participants’ accounts.

This file will provide participant status codes (e.g., leave without pay, insufficient funds, terminations, retirements, and transfers) to assist the FSAFEDS contractor with managing enrollment and suspending claims.

The FSAFEDS contractor will also be required to process a pre-funding file to enable it to pay health care claims before receiving payment. This pre-funding file will contain participants for which BENEFEDS has validated their enrollment through data from payroll offices.

BENEFEDS will process a weekly coordination of benefits file containing enrollment demographic data for FSAFEDS participants who are also enrolled in the Federal Employees Dental and Vision Insurance Program (FEDVIP). This file will aid the FSAFEDS contractor in verifying whether all insurance coverage has been processed before calculating the participant’s out-of-pocket cost.

The FSAFEDS contractor will be responsible for processing allotment reconciliation files generated and sent by BENEFEDS with a frequency that aligns to each respective payroll cycle. As part of the payroll payment process, the FSAFEDS contractor receives the funds directly from the payroll provider and is responsible for reporting all received funds to BENEFEDS to assist with reconciliation.

The FSAFEDS contractor will be responsible for sending refunds and account funds transfer requests to BENEFEDS for processing. For refunds, the FSAFEDS contractor will be responsible for sending funds to payroll providers and properly accounting for refunded monies that are recouped on the payment files from the payroll providers. The recouped funds are then passed as negatives on the reconciliation file to FSAFEDS. The FSAFEDS contractor will need to properly account for current year and prior year refunds and account funds transfers.

To ensure accuracy, BENEFEDS and the FSAFEDS contractor will perform 28 reconciliations annually including the following:

10 monthly enrollment reconciliations 6 refund reconciliations 6 account fund transfer reconciliations 2 year-to-date allotment reconciliations 2 agency/payroll demographic data reconciliations 2 BENEFEDS fee reconciliations

D. Customer Service The contractor would need sufficient customer service staff to meet the needs of FSAFEDS enrollees and applicants. A toll-free number and TTY capabilities would be required. Customer service representatives (CSRs) would need to be available by phone at least during standard business hours on Eastern and Pacific times, with extended hours during the annual Federal Benefits Open Season. FSAFEDS usually receives about 15,000 to 50,000 phone calls each month, with as many as 70,000 calls each month during the annual Federal Benefits Open Season. While most calls will be in English, CSRs must have access to interpreters for other major languages, including accommodations for American Sign Language.

CSRs would also need to be available by email. FSAFEDS usually receives about 2,000 to 4,000 emails each month, but some months it can receive as many as 7,000 emails.

CSRs will need access to each enrollee’s account and claims history without asking for a social security number. Phone and email responses would need to be reviewed regularly for accuracy. Response time and call abandonment rate will also factor into the contractor’s QASP.

E. Marketing, Education, and Enrollment FSAFEDS presents unique marketing and education challenges. Unlike other Federal insurance benefits, FSAFEDS does not automatically renew each year.

Participants must actively re-enroll during each annual Federal Benefits Open Season. The contractor will need to exercise marketing and education savvy to remind busy participants to re-enroll.

Another challenge is educating the roughly 80% of eligible employees who are not enrolled in the program. Employees do not commonly understand flexible spending accounts the way they understand health insurance and life insurance.

Misconceptions about the program abound. The contractor will need to explore ways to educate non-enrolled employees dispersed across the United States and the world without having access to employees’ contact information. Attending agency benefit fairs, thoughtful web advertising, and building relationships with agency benefits officers will be essential. Approximately 155 agencies currently participate in FSAFEDS.

IV. Sources Sought Notice Response Instructions

A. Submission Submit responses to this SSN via email ONLY to Erica Randall, Contract Specialist at Erica.Randall@opm.gov and Carrie Fairbanks, Contracting Officer at Carrie.Fairbanks@opm.gov. The email subject line shall be "FSAFEDS Sources Sought.”

The submission must be received by 4:00 pm Eastern Time, Monday, December 18, 2024, and shall comply with the formatting and size limitations stated below. NO HARD COPY OR FACSIMILE SUBMISSIONS WILL BE ACCEPTED. Cover letters and extraneous materials (brochures, general capability statements, etc.) should not be submitted. Responses received after the closing date may not be considered.

B. Format Responses to this notice must be in Microsoft Word or Adobe Portable Document Format (PDF). Responses to this notice shall not exceed ten (10) single-spaced pages.

C. Each company’s response to this Sources Sought Notice should contain the following information:

1. Company Information: Please complete the information below to the best of your ability. Where the Government asks for URLs, please only provide URLs, non URLs will be deleted.

Company Name:

Associated Contract Vehicle:

POC Email:

POC Phone#:

Company Website URL:

UEI #:

CAGE Code:

2. Indicate your company’s business size in relation to NAICS Code 524292 – Third Party Administration of Insurance and Pension Funds. Include whether your company is a small business, veteran-owned small business, service-disabled veteran-owned small business, HUBZone small business, small disadvantaged business, women-owned small business, or 8(a) business development participant. Indicate whether your SAM registration currently includes Reps & Certs / Assertions relative to this NAICS code.

mailto:Erica.Randall@opm.gov

3. A summarized description of your company’s experience with offering flexible spending account (FSA) services, including the name of each agency/company, an appropriate point of contact, dollar value, period of performance, and contract type.

Please identify if the agency/company for which you’ve provided these services is a privately owned organization or a Federal, State or local entity.

4. The potential requirement associated with this sources sought notice may require the performance of a transition period between the current contractor and a new contractor of up to six (6) months. Should such a transition period be required, this period of time will be ‘NOT SEPARATELY PRICED’ (NSP) because two (2) contractors will work cooperatively, simultaneously to ensure a smooth transition from one contractor to the next. Therefore, please identify your company’s ability to undertake the financial risk associated with a delay in receiving payment associated with such a ‘transition period’ of up to 6 months for the requirement identified in the ‘Draft Statement of Work’.

5. Description of how many enrollees in a FSA your company could currently support, ensuring that you can support current claim, web, and customer service traffic.

a. Does your company currently have a claims processing system that provides the required functionality for a customer of similar size and magnitude? If so, how much time would it take to build a stand-alone processing system to provide the required functionality for OPM? How much time would it take to recruit and train claims processors to support the requirement identified in the draft

SOW?

b. Also identify what would be required for it to expand to support up to 2 million eligible employees

6. Description of the education, skills and qualifications of your current employees that perform the required services, or your expectations of employees to be hired to perform such services. For example, your company’s current customer service staff that could provide the required functionality for OPM’s size and magnitude? If your company does not have current staff to perform the required services, how soon could you recruit them?

7. Does your company currently have a website that could provide the required enrollment and program query functionality for a customer of similar size and magnitude? If so, how much time would it take, using your current processes, to provide the required standalone functionality for OPM? If not, how soon could your company stand up and operate a website that provides the required enrollment and program query functionality for OPM?

8. Description of your company’s experience working with an enrollment reconciliation and payroll deduction administrator similar to BENEFEDS.

9. Description of your experience with electronic (paperless) claims processing in which health, dental, and vision carriers submit enrollee claims data.

10. Description of your experience with rolling out large-scale education campaigns and increasing enrollments in employee benefit programs.

11. Description of how your company would ensure compliance with section 508 of the

Rehabilitation Act.

12. Description of your process to identify and correct invalid paper and electronic (paperless) claims.

13. If the Government issues an RFP for this requirement, would you submit a proposal? If yes, how much time would you need to respond?

AFTER YOU SUBMIT YOUR RESPONSE:

A confirmation email will be sent to the provided POC email with confirmation that your response has been received with a copy of your completed responses.

Additionally, industry is welcome to provide comment / feedback on the draft documents as well as submit a list of questions that the Government should ensure are addressed in the forthcoming PWS or other documents in order to provide greater clarity when the RFP is released. Please be advised that any questions /comments presented during the RFI phase will not be answered back to individual respondents.