Third Party Administrator for FSA RFP - Updated.pdf

TPA for FSAs-Healthcare and Dependent Daycare

Solicitation #: F10B6600006/ BPM054797 RFP Document

RFP for Department of Budget and Management Page 1 of 130

STATE OF MARYLAND

DEPARTMENT OF BUDGET AND MANAGEMENT (DBM)

REQUEST FOR PROPOSALS (RFP)

THIRD PARTY ADMINISTRATOR SERVICES FOR FLEXIBLE

SPENDING ACCOUNTS - HEALTHCARE AND DEPENDENT

DAYCARE

RFP NUMBER F10B6600006/BPM054797

ISSUE DATE: JANUARY 23, 2026

A Prospective Offeror that has received this document from a source other than eMarylandMarketplace

Advantage (eMMA) https://procurement.maryland.gov should register on eMMA https://emma.maryland.gov/

MINORITY BUSINESS ENTERPRISES ARE ENCOURAGED TO RESPOND TO THIS

SOLICITATION.

https://procurement.maryland.gov/ https://emma.maryland.gov/

RFP for Department of Budget and Management Page 2 of 130

STATE OF MARYLAND

DEPARTMENT OF BUDGET AND MANAGEMENT (DBM)

KEY INFORMATION SUMMARY SHEET

Request for Proposals Services - Third Party Administrator Services for Flexible Spending

Accounts - Healthcare and Dependent Daycare

Solicitation Number: F10B6600006/BPM054797

RFP Issue Date: January 23, 2026

RFP Issuing Office: Department of Budget and Management (DBM or the "Department")

Procurement Officer: Donshane Turner

45 Calvert Street

Annapolis, MD 21401

Email:

Phone Number:

donshane.turner2@maryland.gov

410-260-7885

Proposals are to be sent to:

Submit on emma.maryland.gov under Solicitation Number

F10B6600006/BPM054797

To submit a proposal, offerors must first register on emma.maryland.gov.

We recommend registering in advance to become acquainted with the site.

No Bid/Proposal Notice

Feedback Form

*If you are not submitting a proposal for this solicitation, submit

Attachment 1 with your reasons why.

Pre-Proposal

Conference:

February 5, 2026 @ 10:00 AM Local Time

Virtual Teleconference (Login Information Provided by Procurement

Officer Upon Receipt of Attachment 2)

See Attachment 2 for instructions.

Questions Due Date and

Time:

February 12, 2026 @ 12:00 PM Local Time

Proposal Due (Closing)

Date and Time:

February 23, 2026 @ 2:00 PM Local Time

Offerors are reminded that a completed Feedback Form is requested if a no-bid/proposal decision is made (see Attachment 1 - No Bid

Notice/Vendor Feedback Form).

RFP for Department of Budget and Management Page 3 of 130

MBE Subcontracting

Goal:

An overall Minority Business Enterprise (MBE) subcontract participation goal of eighteen percent (18%) of the total contract dollar amount, including all renewal option terms, if any, has been established for this procurement. The overall MBE subcontract participation goal includes the following subgoals, which have been established for this procurement:

__0__% for African-American MBEs;

__3__% for Asian-American MBEs;

__2__% for Hispanic-American MBEs; and

_10__% for Woman-Owned MBEs.

Refer to Exhibit 1 for information on how goal setting was determined.

Also, refer to Appendix 4 for information about the MBE or DBE program and goals.

VSBE Subcontracting

Goal:

This solicitation includes a VSBE participation Goal of 2%

Refer to Exhibit 1 for information on how goal setting was determined.

Also, refer to Appendix 5 for information about the VSBE program and goals.

Procurement Method: A Contract will be awarded in accordance with the Competitive Sealed

Proposals method under COMAR 21.05.03.

Multiple or Alternate

Bids:

Multiple or alternate Proposals will not be accepted.

Contract Type: The Contract that results from this RFP shall be a fixed unit price contract for indefinite quantities as provided in accordance with COMAR

21.06.03.02A(2) and 21.06.03.06A (2) in connection with the administrative fee paid to the Contractor, plus reimbursement of the specific amounts paid to Participants as part of the correct administration of the FSAs. See COMAR 21.06.03.03. No other costs, fees or charges of any type are payable or reimbursable by the State to the Contractor for services required under the Contract.

Contract Duration: Two (2) year base period with three (3) one (1) year option periods.

Primary Place of

Performance:

As proposed by Offeror.

SBR Designation: No

Federal Funding: No

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TABLE OF CONTENTS – RFP

1 Minimum Qualifications

1.1 Offeror Minimum Qualifications

2 Contractor Requirements: Scope of Work

2.1 Summary Statement

2.2 Background and Purpose

2.3 Contractor Responsibilities and Tasks

2.4 Experience and Personnel

2.5 Substitution of Personnel

2.6 Supplemental Category of Work Requirements and Responsibilities

3 Standard Terms and Conditions

3.1 Contract Initiation Requirements

3.2 End of Contract Transition

3.3 Invoicing

3.4 Liquidated Damages

3.5 Disaster Recovery and Data

3.6 Problem Escalation Procedure

3.7 SOC 2 Type 2 Audit Report

3.8 Security Requirements

3.9 Nonvisual Access

3.10 Work Orders

3.11 Payments by Electronic Funds Transfer

3.12 Prompt Payment Policy

3.13 Federal Funding Acknowledgement

3.14 Conflict of Interest Affidavit and Disclosure

3.15 Non-Disclosure Agreement

3.16 Maryland Healthy Working Families Act Requirements

3.17 The State of Maryland’s Commitment to Purchasing Environmentally Preferred Products and

Services (EPPs)

3.18 Insurance Requirements

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3.19 Non-Compete Clause Prohibition

3.20 Additional Clauses

4 Proposal Submission Information and Instructions

4.1 eMaryland Marketplace Advantage (eMMA)

4.2 Electronic Means

4.3 Pre-Proposal Conference

4.4 Questions

4.5 Proposal Due (Closing) Date and Time

4.6 Economy of Preparation

4.7 Public Information Act Notice

4.8 Oral Presentation

4.9 Duration of Proposals

4.10 Revisions to the RFP

4.11 Cancellations

4.12 Incurred Expenses

4.13 Protest/Disputes

4.14 Offeror Responsibilities

4.15 Acceptance of Terms and Conditions

4.16 Compliance with Laws/Arrearages

4.17 Verification of Registration and Tax Payment

4.18 False Statements

5 Proposal Submission Information and Instructions

5.1 Two Part Submission

5.2 Proposal Delivery and Packaging

5.3 Volume I - Technical Proposal

5.4 Volume II – Financial Proposal

6 Evaluation and Selection Process

6.1 Evaluation Committee

6.2 Technical Proposal Evaluation Criteria

6.3 Financial Proposal Evaluation Criteria

6.4 Reciprocal Preference

6.5 Selection Procedures

RFP for Department of Budget and Management Page 6 of 130

6.6 Documents Required upon Notice of Recommendation for Contract Award RFP Attachments

(Table B)

7 RFP Appendices and Exhibits

7.1 Appendices (Table C)

7.2 Exhibits (Table D)

RFP for Department of Budget and Management Page 7 of 130

1 Minimum Qualifications

1.1 Offeror Minimum Qualifications

There are no Offeror Minimum Qualifications for this procurement.

THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

RFP for Department of Budget and Management Page 8 of 130

2 Contractor Requirements: Scope of Work

2.1 Summary Statement

2.1.1 This Request for Proposals (RFP) is issued to procure the goods or services, as specified in this Section 2, from a contract between the selected offeror(s) and the

State of Maryland (“State”). The Department of Budget and Management (DBM) is issuing this Request for Proposals (RFP) to provide Third Party Administrator

(TPA) Services for the State of Maryland’s Flexible Spending Account (FSA) plans – Healthcare and Dependent Daycare - for eligible and enrolled Participants of the State’s FSAs.

2.1.2 The Segal Company (Eastern States), Inc. (Segal) and Managed Care Advisors, as the State’s benefits consultants for DBM, will be assisting the State in this procurement.

2.1.3 This is a single award. See RFP Section 6.5 Selection Procedures for more Contract award information.

2.1.4 The purpose of this solicitation is to procure goods and services, as specified in this

RFP, from a Contract between the selected Offeror and the State. The anticipated duration of services to be provided under this Contract includes the implementation period, two (2) base years, and three (3) one (1) year renewal options.

2.1.5 A Contract award does not ensure a Contractor will receive all or any State business under the Contract.

2.1.6 An Offeror, either directly or through its subcontractor(s), must be able to provide all goods and services and meet all of the requirements requested in this solicitation, and the successful Offeror (the Contractor) shall remain responsible for

Contract performance regardless of subcontractor participation in the work.

2.2 Background and Purpose

2.2.1 The State is issuing this solicitation for the purposes of acquiring TPA Services for the State of Maryland’s FSA plans – Healthcare Flexible Spending Account

(HCFSA) and Dependent Daycare Flexible Spending Account (DCFSA) - for eligible and enrolled Participants of the State’s FSAs. The State’s contract with the current TPA for FSAs expires on December 31, 2026. The vendor who is awarded the Contract pursuant to this RFP will be required to perform TPA services anticipated to begin with the Plan Year January 1, 2027, and implementation services in the summer and fall immediately prior to the Plan Year.

2.2.2 The State of Maryland currently offers both types of flexible spending accounts –

HCFSA and DCFSA to its eligible members. Estimated deposits into healthcare and dependent daycare spending accounts for Calendar Year 2024 total

$35,530,828. The table below shows current flexible spending account summary participation information by plan category.

RFP for Department of Budget and Management Page 9 of 130

Table 1

Participants

CY25

HCFSA Only DCFSA Only Both Accounts

Active 20,024 2,522 1,486

Satellite 176 23 20

TOTAL 20,200 2,545 Not available

Deposits CY25 $30,133,795.32 $8,593,428.35 Not available

Reimbursements CY25 $26,360,350.84 $5,794,294.83 Not available

Total Claims Processed CY25 Not available Not available 464,843

Participants

CY24

HCFSA Only DCFSA Only Both Accounts

Active 18,399 2,426 1,370

Satellite 141 15 15

TOTAL 18,540 2,441 1,385

Deposits CY24 $26,253,330.34 $8,127,598.06 Not available

Reimbursements CY24 $25,335,600.59 $7,820,495.28 Not available

Total Claims Processed CY24 Not available Not available 454,030

2.2.3 Participant salary reductions for the flexible spending accounts are taken from employees’ paychecks for 24 of the 26 pay periods for bi-weekly employees, 12 of the 12 pay periods for monthly employees, and 20 of the 21 pay periods for ten-month employees. The number of annual deductions is subject to change.

2.2.4 FSAs are currently operated on a calendar year basis, from January 1 through

December 31. Participants have until April 15th the end of each Calendar Year to submit prior year reimbursement requests with all necessary substantiating documentation. No requests for reimbursement are accepted after April 15th.

However, if a request for reimbursement is received prior to the deadline, but additional information to approve that request is required from the Participant, such additional information may be submitted after April 15th.

2.2.5 The State is interested in reviewing proposals to include Participant pre-tax contributions to a Commuter Benefit Account as defined in Appendix 1, Abbreviations and Definitions. If elected, the State’s pre-tax Commuter Program would allow employees to set aside pre-tax money to help pay for out-of-pocket parking, van pooling, or mass transit expenses incurred as they travel to and from work. Employees would authorize the State to deduct a pre-tax amount for parking, vanpool, and/or mass transit from each paycheck up to the allowed IRS limits. Any

RFP for Department of Budget and Management Page 10 of 130 amount elected over the IRS limit would be taken as a separate post-tax deduction.

Eligible employees would be able to enroll, change, or cancel their enrollment anytime in this program through the administrator’s online enrollment website and mobile app. The State may or may not decide to add a Commuter Benefit Account to this contract as part of this procurement. Providing a Commuter Benefit Account at an additional cost to the State is an optional service, further explained in Section

2.3.13.

2.3 Contractor Responsibilities and Tasks

2.3.1 General Services and Performance

A. The Contractor shall provide TPA services for the FSA plans beginning with the first Plan

Year covered by the Contract, expected to be the Plan Year beginning on January 1, 2027.

The Contractor will also be required to provide TPA services for each FSA for every Plan

Year that commences during the term of the contract, including run-out administration of reimbursement requests for expenses incurred during the Plan Year and filed by April 15th.

B. Below are general descriptions of the administrative and other services that are required of the Contractor in connection with this procurement. In addition, Exhibit 5 provides additional detail and several specific services that must be provided by the Contractor under this Contract.

2.3.2 Project Activity and Due Dates

The Contractor shall begin implementation activities, including an implementation meeting with the State, upon Contract commencement and complete all implementation activities as needed to prepare to commence services on January 1, 2027. The Contractor shall work with the State to develop a program rollout, including a communications plan to increase awareness and promote enrollment in the spending account benefits.

Table 2 - Implementation Timeline

DATE ACTIVITY

Within five (5) Business Days of the approval of the contract award by The Board of Public

Works

Kick off meeting with the Contract Manager, Contract

Administrator, EBD Director and other State representatives to begin project planning and to schedule weekly status meetings.

Within five (5) Business Days after the Kick-Off Meeting

Provide a draft project schedule to the Contract Manager, Contract Administrator, and EBD Director for review and approval.

Within ten (10) Business Days after the Kick-Off Meeting

Provide a final project schedule to the Contract Manager, Contract Administrator, and EBD Director for review and approval.

RFP for Department of Budget and Management Page 11 of 130

DATE ACTIVITY

Within fifteen (15) calendar days of the approval of the contract award by The Board of Public Works

Begin implementation meetings with the Contract Manager, Contract Administrator, and EBD Director.

Within thirty (30) calendar days of the NTP

Provide methodologies and examples of supporting documentation for each Performance Guarantee to the

Contract Manager and Contract Administrator. The methodologies and supporting documentation shall provide the State the ability to independently test each Performance

Guarantee. (See Exhibit 5)

Within thirty (30) calendar days after the Kick-Off

Meeting

Provide plan benefits documents to the EBD Director and

Contract Manager for review and approval.

Develop and deliver a draft marketing plan for open enrollment and health fairs, including draft open enrollment marketing materials, to the State for review and approval.

Establish necessary accounts with the Comptroller’s Office to enable electronic funds transfer.

Within sixty (60) calendar days after the Kick-Off

Meeting

Provide a final marketing plan for open enrollment and health fairs, including final open enrollment marketing materials, to the EBD Director, Contract Manager, and Contract

Administrator.

August 31, 2026 Information Technology System development and set-up to support program operations, including the website, mobile apps, electronic provider directory, and call center automated voice response system

September 1, 2026 through

October 15, 2026 Attend all scheduled benefits coordinator open enrollment training sessions as determined by the State.

Beginning September 1, 2026 through November 15, 2026

Attend all scheduled open enrollment and health fairs as determined by the State.

Testing to begin November 1, Receive, load, and audit positive files for open enrollment for coverage beginning January 1, 2027.

December 1, 2026

All files loaded, positive file audits completed, data import and export by secure transmission tested between

Contractor, State, and State’s consultants, confirm that all file data points were successfully transmitted, and operational readiness completed.

December 15, 2026 Issue debit cards

RFP for Department of Budget and Management Page 12 of 130

DATE ACTIVITY

January 1, 2027 Go Live Date - Commence benefit coverage and administration of the plan.

Beginning February 1, 2027 Conduct status meetings with the State concerning project development, status, and Contractor(s) performance for at least weekly for the first month following the go live date.

a. Note: Implementation dates noted in Table 2 may shift based on award date. Project schedule should note any differences (and the reason for differences) between deadlines noted in Table

2 and adjusted deadlines.

2.3.3 Account Management Services

A. The Contractor shall provide account management services to the State in connection with the FSA plans, such as:

1. Comprehensive implementation services and support during the initial transition;

2. Provide ongoing account management services;

3. Offer support services for the 2026 open enrollment period (for the Plan Year beginning January 1, 2027) and all subsequent open enrollments during the contract term. The Contractor shall provide services in accordance with

Exhibit 5-7: Performance Guarantees;

4. Review drafts of the plan description contained in the State’s annual benefits guide within five (5) Business Days of a request from the State;

5. Accept enrollment and deduction information in the form and format as outlined by the Contract Manager and EBD Director, which uses the social security number to identify Participants. Generally, enrollment information is sent weekly in an electronic format, and Payroll Deduction information is sent bi-weekly or monthly in electronic and/or manual formats.

6. The Contractor shall share the expenses for printing and mailing all open enrollment materials (including virtual open enrollment expenses), such as the benefits guide, universal enrollment forms, and other notices or information included in the enrollment kits. The cost will be shared equally among all benefit plans, including medical, dental, prescription drug, flexible spending accounts, life insurance, and accidental death and dismemberment. The total cost will be shared equally among all benefit plans. Approximate cost is $25,000 per year, per plan.

7. The Contractor shall make remittance payments to the State of Maryland, Department of Budget and Management, for open enrollment Materials no later than thirty (30) calendar days after the Contractor's receipt of an invoice for open

Enrollment shared cost. Payments shall be submitted via a separate check with an attached invoice, or via electronic payment, as determined by the State. All payments shall be submitted to: The Department of Budget and Management, Employee Benefits Division (EBD), P.O. Box 1516, Baltimore, Maryland 21203-

RFP for Department of Budget and Management Page 13 of 130

1516, and are subject to change. Documented substantiation of payments is required regardless of the method of delivery.

8. Attend meetings and training sessions: due to the large number of State employees, a diverse population, and numerous employee work locations, the

State sponsors annual benefit fairs during each annual open enrollment period.

The State may conduct 60 or more open enrollment benefit fairs throughout the

State each year to answer employee and retiree questions and enhance engagement in the plans offered. The contractor is expected to provide trained, experienced representatives to attend all open enrollment fairs, in addition to approximately ten

(10) to fifteen (15) open enrollment training sessions and approximately five (5) to ten (10) planning sessions (either in person or by conference call). Representatives shall be trained on the State-specific FSA plans.

B. The Contractor shall comply with the Red Flags regulations and guidance of the

Federal Trade Commission, including but not limited to the regulations in 16 CFR

Part 681, as amended from time to time, in connection with the administration of the debit card(s) offered and provided to members in the FSA plan(s).

C. To the extent that traditional federal or state legal requirements, whether by statute or regulation, come into effect related to the administration or offering FSA plan(s) during the contract term, the Contractor shall administer the FSA plan(s) in accordance with such new legal requirements as amended from time to time.

D. The Contractor shall assume a share of the cost of an annual State-conducted

Participant satisfaction survey on its health plan.

E. The Contractor shall assign a dedicated (but not necessarily exclusive) Contractor

Account Executive as described in Section 3.10 of the RFP. The State of Maryland reserves the right to accept or decline assigned personnel for any reason at any time.

F. The Contractor shall assign a dedicated (but not necessarily exclusive)Contractor

Account Service Representative as described in Section 3.10 of the RFP. The State of

Maryland reserves the right to accept or decline assigned personnel for any reason at any time.

G. The Contractor shall provide a dedicated (but not necessarily exclusive) account management team for the State. The State of Maryland reserves the right to accept or decline assigned contacts for any reason at any time.

H. The Contractor shall provide a dedicated (but not necessarily exclusive) customer service team for the State that is separate from the claim processing unit. The State of

Maryland reserves the right to accept or decline assigned contacts for any reason at any time.

I. The Contractor shall provide a dedicated (but not necessarily exclusive) claim processing unit for the State. The State of Maryland reserves the right to accept or decline assigned contacts for any reason at any time.

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2.3.4 HIPAA Privacy and Security Provision

A. By referencing the duties of a Business Associate, the State is not asserting that the that Contractor will not be acting as a Covered Entity for the purposes of HIPAA, the

HI-TECH Act, and any other law and/or regulation where such a definition is applicable. The Contractor shall be a Business Associate of the State in connection with the Flexible Spending Account plans. The HCFSA plan is subject to the Health

Insurance Portability and Accountability Act (HIPAA) of 1996, including all pertinent privacy regulations (45 C.F.R. Parts 160 and 164) and security regulations

(45 C.F.R. Parts 160, 162, and 164), as amended from time to time, issued by the

U.S. Department of Health and Human Services (DHHS).Although the DCFSA plan is not a health plan subject to HIPAA, the Contractor shall take equivalent steps to make sure that all personal information is protected. If the State elects to move forward with a Commuter Benefit Account, the Contractor shall take equivalent steps to make sure that all personal information is protected in accordance with HIPAA as well as the Maryland Personal Information and Protection Act (PIPA).

B. The Contractor shall comply with the Health Information Technology for Economic and

Clinical Health (HITECH) Act of 2009, as amended from time to time.

C. Pursuant to the HI-TECH Act, Business Associates are subject to additional compliance requirements and are liable for civil and criminal penalties for violations of certain HIPAA security and privacy provisions. In addition to those obligations imposed by federal law, the Contract (in this section of the RFP and Exhibit 5) requires certain actions and performance by the Contractor in order for the HCFSA plan and the Department as sponsor of the HCFSA to be fully compliant with HIPAA.

D. In connection with PHI held, created, maintained, or transmitted in connection with the HCFSA and personal data held, created, maintained, or transmitted in connection with the DCFSA, the Contractor shall:

1. Retain, maintain, create, transmit, and destroy such PHI and personal data in a manner that renders such data and information unusable, unreadable, and indecipherable to unauthorized individuals;

2. Retain, maintain, create, transmit, and destroy such PHI and personal data in a manner fully consistent and compliant with guidance, policies, and regulations issued by the Department of Health and Human Services that applies to PHI, also applying such standards to personal data;

3. Notify the Department of any breach, as that term is defined in the HI-TECH

Act, §13400 (1), as soon as practicable, but in any event within ten (10) Business

Days;

4. Provide, or pay to provide, notice to affected individuals in the form, content, manner, method, and timing to meet the provisions of the HI-TECH Act, §§13400 -13402, in the event of a breach of personal information.

E. Breaches of Unsecured PHI

1. A breach shall be treated as discovered in the terms described in 45 CFR

§164.410

2. Notice to the Department:

i. Contractor shall promptly notify the Contract Manager of a breach of unsecured PHI without unreasonable delay, and in no case, no later

RFP for Department of Budget and Management Page 15 of 130 than ten (10) Business Days following discovery of the breach. For purposes of clarity, the Contractor shall notify the Contract Manager of an incident involving the acquisition, access, use, disclosure, or improper disposal of PHI within ten (10) Business Days after discovery of an incident, even if the Contractor reasonably believes but has not conclusively determined within that time that the incident constitutes a breach as defined by HIPAA.

3. Notice to Participants

i. The Contractor shall provide notice to affected Members and to the media in the form, content, manner, method, and timing required to meet the requirements of 45 CFR §§164.404 and 164.406, applied as if Contractor were a covered entity in connection with the group plan(s) administered by Contractor pursuant to the Business Associate

Underlying Agreement.

ii. The notice(s) required by this section may not be issued until the State has reviewed and approved the notice(s). Such approval may not be unreasonably delayed or withheld.

iii. The Contractor may delay the notice(s) required pursuant to sections

164.404(b) and 164.406(b) only if permitted pursuant to 45 CFR

§164.412.

4. Notices to DHHS

i. The Contractor shall comply with the regulations and guidance issued by the federal Department of Health and Human Services on or about

August 24, 2009 (74 Federal Register 42740 (08/24/09), available online at https://www.federalregister.gov/), and any future regulations issued by the federal Department of Health and Human services pursuant to the HI-TECH Act, in complying with the HIPAA privacy and security provisions of the RFP and the Contract. The term

‘unsecured protected health information “or “unsecured PHI” shall be interpreted and applied consistent with such regulations.

ii. The Contractor shall submit the required breach notices to the

Secretary of DHHS on behalf of the Department, the State, the group plan(s), and the Program; and provide a copy of the notice to the

Contract Manager.

F. The Contractor(s) shall review any guidance from DHHS specifying the technologies and methodologies that render PHI unusable, unreadable, or indecipherable to unauthorized individuals. Contractor further agrees, to the extent practical, appropriate, and reasonable, to incorporate such guidance into its administrative, physical, and technical safeguards to protect the confidentiality, integrity, and availability of PHI.

G. Electronic Health Records

a. Contractor(s) shall notify the Department when Contractor uses or maintains electronic health record(s) with respect to PHI.

b. As of the applicable effective date identified in HITECH §13405(c)(4), when complying with the obligations to respond to requests for accounting under 45 CFR

§164.528, Contractor(s) shall respond to requests for an accounting of disclosure of about:blank

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PHI in compliance with the requirements of §13405(c)(1) and (3) of the HITECH

Act and any regulations promulgated by the Secretary of DHHS pursuant to

§13405(c)(2) of the HITECH Act. The requirements of this section shall apply if the

Contractor uses or maintains an electronic health record with respect to PHI. When complying with the obligation to provide access to PHI under 45 CFR §164.528, Contractor(s) shall respond to requests for access to PHI in compliance with the requirements of §13405(e) of the HITECH Act. The requirements of this section shall apply if the Contractor uses or maintains an electronic health record with respect to PHI.

c. When complying with the obligation to provide access to PHI under 45 CFR

§164.528, Contractor(s) shall respond to requests for access to PHI in compliance with the requirements of §13405(e) of the HITECH Act. The requirements of this section shall apply if the Contractor uses or maintains an electronic health record with respect to PHI.

d. Contractor(s) shall confirm that their bid and the plan design offered are in compliance with all federal and state laws and regulations pertaining to employee benefit plans.

e. Contractor(s) shall have the necessary systems capability and comply with HIPAA's administrative simplification standards related to electronic data interchange (EDI), including the code set/transactions requests of 45 CFR Part 162.

f. Contractor(s) shall require any agents and subcontractors it brings onto the project(s) covered by this RFP to comply with HIPAA standards for EDI.

g. Contractor(s) shall ensure that the State data will not be sold or shared with another organization without the prior written authorization of the State and unless compliant with HIPAA as an action by the Plan.

h. Contractor(s) shall provide at least six (6) months’ notice of any significant planned systems upgrades or changes, including but not limited to claims, customer service, eligibility, and corporate operating systems.

i. Contractor(s) shall accept electronic transfer of eligibility data in a format indicated by the State, including cloud-based transfers.

j. Contractor(s) shall accurately convert State data files, including the State master enrollment file and any other relevant files, to the Contractor's data system.

k. Contractor shall use and disclose the minimum necessary amount of personal information and PHI, or deidentified data, wherever and whenever possible to do so and meet the needs of satisfactory performance of the Contract.

l. File transfers between the Contractor and the State shall be exchanged using a secure protocol like SCP/SFTP, Virtual Private Network (VPN, or another method approved by the State of Maryland, Department of Information Technology.

m. File transfers with other entities shall be exchanged in a secure, encrypted, and mutually agreed-upon format.

n. Contractor(s) shall maintain eligibility records for all participants

o. Contractor(s) shall conduct and maintain eligibility reconciliations between

Contractor files and the State's eligibility files.

p. Contractor(s) shall process and/or update eligibility immediately for a Member if requested. In addition, the Contractor shall also provide the State or its designee with both the ability to make real time updates to the Contractor's eligibility database and the ability to verify eligibility.

RFP for Department of Budget and Management Page 17 of 130

q. Contractor(s) shall retain records for a minimum of seven (7) years or in excess of the period required by the Contract if required by state or federal regulations.

r. Contractor(s) shall transfer to the State, within thirty (30) calendar days of notice of termination, all required data and records necessary to administer the FSA plans, subject to state and federal confidentiality considerations. The transfer may be made electronically, in a file format to be determined based on the mutual agreement between the State and the provider of services at no additional charge.

2.3.5 Participant Communications

A. The Contractor shall provide adequate Participant communication, including the following at a minimum:

1. Clear instructions for the submission of reimbursement requests;

2. Clear explanations of reimbursements and denials of reimbursements;

3. Explanation of benefit communications;

4. Forms to request reimbursements, customized for State of Maryland HCFSA and DCFSA Participants;

5. Clear explanations of the reimbursement process, including time frames for submission specific to Grace Period, Run-out Period, and end of employment or account termination, with target time frames for the issuance of reimbursements;

and

6. Customized quarterly statements of Participant account activity and balances.

B. All information and instructions provided by the Contractor to Participants shall be:

1. Approved by the State;

2. Accurate, free of typographical and mathematical errors; and

3. Provided in accordance with the timeline set by the Contract Manager and

EBD Director.

C. The Contractor shall bear the costs of providing correct information in the event of miscommunications or mistaken communications.

2.3.6 Website, Mobile App, and Online Access for Participants

A. The Contractor shall provide and administer a dedicated website, mobile app (for both Apple and Android devices), and online administration functionality for the exclusive use of State Participants. The website, mobile app, and online administration functionality for Participants shall include, at a minimum:

1. Encryption and multi-factor authentication to guarantee protection of Participant privacy and confidential data (PHI), personal data, and banking information as applicable;

2. 24/7 access to account balance and claim status;

3. 24/7 access to accurate and current plan benefits and eligibility information;

4. Ability to submit reimbursement requests online; and

5. Ability to perform all of the above tasks via mobile app.

RFP for Department of Budget and Management Page 18 of 130

B. The Contractor shall ensure content posted on the State’s microsite is in nonvisual compliance as described in Section 3.9, Nonvisual Access. The content of any information on external links that are posted on the State’s microsite shall also be in nonvisual compliance as described in Section 3.9, Nonvisual Access.

2.3.7 Customer Service

A. The Contractor shall provide a state-of-the-art member and customer service operation

(including a dedicated toll-free line) that is available to plan Participants (both in-state and out-of-state) from at least 8:00 a.m. to 8:00 p.m. Local Time, on Business Days.

B. This toll-free customer service line shall be supported by live representatives during the core hours of 8:00 a.m. to 8:00 p.m. Local Time and by an automated voice-response system twenty-four (24) hours a day, seven (7) days a week. Participants

(both in-state and out-of-state) can access this system directly to request and review account balances, claim status, funds available, and assistance with online access.

This operation should comply with PG-1, in "Exhibit 5-7: Performance Guarantees."

C. During call center live hours, the automated voice-response answering system will be an automatic answer system that picks up within 30 seconds, directs Participants into a queue to be serviced, and allows the Participant to opt out to a live representative at any time during the call. A live service representative (with knowledge of the State of

Maryland account) shall pick up within 30 seconds or less during call center live hours.

The representative must be able to address the members’ concerns.

D. Contractor shall confirm that no administrative functions required under this contract are performed offshore.

E. The Contractor shall permit employees to receive reimbursement for eligible healthcare and dependent daycare expenses for themselves and their eligible dependents and issue Explanation of Benefits (EOB) details with reimbursement payments. The Contractor shall provide employee notification of account balances quarterly and annually.

F. The Contractor shall send reminder notices to all Participants with account balances as follows:

1. October 1 - reminder that the Plan Year ends December 31;

2. November 15 - reminder of deadline to submit claims for the current Plan Year.

This should include information on the upcoming Grace Period deadline of

March 15 and final submission of claims on April 15th of the following year.

3. February 1 –reminder deadline for Grace Period is March 15th; deadline for submission of Plan Year claims is April 15th; and

4. March 31 - reminder Plan Year claims due April 15th

G. The member and customer services operation shall include:

1. Knowledgeable staff available to answer questions on plan eligibility, plan guidelines, benefit levels, reimbursement request procedures, and status of reimbursement requests;

RFP for Department of Budget and Management Page 19 of 130

2. The ability to maintain an eligibility file that identifies eligible Participants, account elections, account balances, claims filed, and claims paid or denied;

3. A system for providing EOBs to eligible Participants together with proper reimbursement amounts;

4. Adequate access to the customer service system for individuals with disabilities.

(TTY and online access for deaf individuals, and full-service phone access for blind individuals); and

5. An integrated claims and customer service system enabling both claims and service team members to view all screens.

H. The Contractor shall have a process for resolving any billing or claim errors with a

Participant’s claims and the process for Participants to resolve questions or concerns about a reimbursement request.

I. The Contractor shall be able to provide reimbursements using direct deposit to a

Participant’s account.

J. The Contractor shall provide Participant support services to educate employees about the benefits of the HCFSA and DCFSA plans and their respective responsibilities.

K. The Contractor is responsible for accurately processing reimbursements on behalf of the State. If an overpayment is made, the Contractor shall:

1. Send a minimum of three (3) collection letters via mail or email;

2. Maintain and document dates of each collection attempt;

3. If a Member fails to deliver necessary documentation within 60 calendar days, Contractor shall suspend the Member’s debit card and require paper submission for future expenses;

4. Contractor shall request refunds (pursue overpayments) or offset future manual claims with the Member’s outstanding overpayment; and

5. If the Contractor fails to demonstrate appropriate and efficient recovery efforts, the Contractor shall reimburse the State for the improper payment.

L. Member service operations shall include a system capable of properly suspending debit cards for claims that remain unsubstantiated after multiple requests and a system to ensure that lost or stolen debit cards are not reissued if in a suspended status.

M. With regard to the HCFSA and DCFSA, Contractor shall provide directions for submitting requests for reimbursements for inclusion in the annual open enrollment materials and made available by the Contractor on its website. The directions shall include all necessary information to properly submit claims for reimbursement.

N. For each request for reimbursement in the HCFSA and the DCFSA, the Contractor shall retain a file of all such applications filed by each Participant, with a record of whether the request for reimbursement was approved or denied, the amount of such reimbursement, the means of making the reimbursement (electronic transfer, check, etc.), substantiation of request, and confirmation, if any, of the receipt of the reimbursement.

RFP for Department of Budget and Management Page 20 of 130

2.3.8 Plan Design

A. Reimbursement requests:

1. The Contractor shall process reimbursement requests in accordance with the plan design of the HCFSA and DCFSA, all applicable provisions of the Internal

Review Code (IRC) governing such arrangements, including, without limitation, regulations, rules and guidance issued by the Internal Revenue Service (IRS), and the State’s Cafeteria Plan (i.e. plan design for the FSAs). The Department will provide a copy of the State’s Cafeteria Plan, as amended from time to time, for use in properly reimbursing qualified claims incurred. At all times, the

Contractor shall administer the FSA plans and reimburse claims in a manner designed to keep the FSAs compliant with applicable law and the Cafeteria

Plan.

2. Elements of the plan design of the FSAs are provided on Exhibit 5-3.

3. The Contractor shall be knowledgeable about all applicable IRC requirements, including, without limitation, regulations, rules, and guidance issued by the IRS, that relate to the administration and design of flexible spending arrangements.

When and if new requirements, regulations, rules, or guidance are issued, the

Contractor is expected to provide information concerning how such changes may impact the plan and include an implementation plan.

4. Deadlines for submitting reimbursement requests must be adequately communicated and applied consistently, in compliance with applicable IRC regulations.

5. In connection with the HCFSA, the Contractor shall direct the reimbursement to each eligible covered Participant for all medical expenses authorized for reimbursement pursuant to IRC Section 105(b) and pursuant to section 9003 of the Affordable Care Act (ACA) provisions regarding over-the-counterdrugs.

6. Participants whose coverage ends during a Plan Year will be allowed a 90-day run-out period from the date of termination to submit reimbursement requests for eligible expenses incurred prior to the termination date in the applicable

FSA.

7. Unused employee contributions may not be cashed out or converted to any other taxable or nontaxable benefit.

8. The Contractor shall pay eligible claim reimbursements to Participants in accordance with the plan description and limits of applicable law.

9. The Contractor shall provide accounting for deposits and disbursements from each employee's account.

B. Grace Period

1. Under the pre-tax HCFSA only, there is a two (2) month and fifteen (15) day

“Grace Period” to obtain reimbursement for eligible out-of-pocket healthcare expenses, pursuant to IRS Notice 2005-42 and Proposed Treasury Regulation

§1.125-1. The “Grace Period” is not the Run-out period during which

Participants may submit reimbursement requests for incurred claims; the Grace

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Period provides an additional two (2) months and fifteen (15) days during which a Participant may incur claims in order to exhaust FSA balances that remain at the end of the previous Plan Year, after all eligible expenses incurred during the previous Plan Year have been reimbursed.

2. The Participants have an extra two (2) months and fifteen (15) days at the end of the Plan Year to incur and submit eligible healthcare expenses, so long as they are enrolled on the last day of the Plan Year. This Grace Period applies to

HCFSAs only. A Participant can submit claims for eligible out-of-pocket healthcare expenses incurred through March 15th, provided the Participant is enrolled in the HCFSA on December 31st, the last day of the Plan Year.

3. In the event that a Participant (i) has a balance remaining from an HCFSA for an immediately preceding Plan Year, (ii) has elected an HCFSA for the next Plan

Year, which includes the Grace Period for the immediately preceding Plan Year and (iii) submits a claim for reimbursement for a qualified expense incurred during the Grace Period, then the Participant will be reimbursed first from the

HCFSA for the immediately preceding Plan Year up to the point where the balance in the HCFSA for the immediately previous Plan Year is exhausted, and then from the HCFSA for the Plan Year during which the qualified expenses were incurred.

4. This Grace Period does not apply to DCFSA. Therefore, for a DCFSA, Participants can only submit claims for daycare services incurred through

December 31st.

5. All FSA reimbursement requests (claims for reimbursement) for claims incurred in the prior calendar year must be submitted by April 15th.

6. There is no carry-over provision.

C. Debit Cards

The FSA plans shall offer the use of debit cards, as authorized under applicable law, for the processing of reimbursement requests for eligible expenses through the HCFSA and

DCFSA.

1. Use of debit cards in connection with the FSA plans must comply with all applicable IRS regulations, rules, and guidance, including Proposed Treasury

Regulation § 125-6 (72 FR 42938 et seq. (August 6, 2007), IRS Notice 2007-2 and IRS Notice 2006-69. As additional requirements, regulations, rules and guidance are issued by the IRS and/or Treasury Department, the Contractor shall comply with these guidelines and regulations.

2. Use of debit cards in connection with the FSA plans must also comply with

Regulation E of the Federal Reserve System, as amended, including the preparation and issuance of initial disclosure notices, notices regarding procedure for error resolution, notices on provisions for authorizing one-time transfers, and periodic account statements.

D. Heroes Earnings Assistance and Relief Tax Act of 2008

1. The Heroes Earnings Assistance and Relief Tax Act of 2008 (Heart Act) allows plans to offer “qualified reservist distributions” of unused amounts in HCFSAs

RFP for Department of Budget and Management Page 22 of 130 to reservists ordered or called to active duty for at least 180 days or on an indefinite basis. See Section 114 of the Heroes Earnings Assistance and Relief

Tax Act, codified at 26 USC §125(g) and (h). The State Cafeteria Plan incorporates this benefit to a certain extent by directing that the reimbursement is authorized to each eligible covered Participant for: (i) all medical expenses authorized for reimbursement pursuant to IRC Section 105(b), including over-the-counter drugs as defined in IRS Revenue Ruling 2003-102, and (ii) qualified reservist distributions authorized by Section 114 of the Heroes Earnings

Assistance and Relief Tax Act, codified at 26 USC §125(g) and (h).

2. Requests for a qualified reservist distribution must be made in accordance with the same procedures for requests for reimbursements of qualified medical expenses, accompanied by documentation of the call or order to active duty during the Plan Year for a period in excess of 179 days. Offerors are requested to specifically address how they plan to administer these arrangements in their proposals.

E. The Contractor shall absorb the cost of programming any benefit design set-up of changes.

2.3.9 Reporting

A. The Contractor shall provide reports as indicated below:

1. The Contractor shall submit all reports to the Contract Manager, Contract

Administrator, and EBD Director.

2. In the case of reports provided to the State or the Department through the VPN or other encrypted, secure mechanisms, the Contractor shall provide notice of the delivery and availability to the Contract Manager, Contract Administrator, and EBD Director through that mechanism at the time of delivery and availability.

3. No report may be considered received by the State unless the Contract Manager has received a copy of the report pursuant to Section 2.3.9(A)(1) or notice pursuant to Section 2.3.9(A)(2) above.

4. Copies of reports and notices of availability of reports to the Contract Manager, Contract Administrator, and EBD Director shall be in addition to the party to whom the original of the report is required to be delivered.

5. When presented for acceptance to the State, a written deliverable defined as a final document shall satisfy the scope and requirements of the RFP for that deliverable

6. The Contractor shall deliver to the State or a designee the required management information reporting in a format specified by the State that provides utilization, claims reporting, and administrative services data by subgroup to the State of

Maryland.

B. The Contractor shall provide monthly reporting as noted below:

1. A monthly report showing processed reimbursements, number of enrolled

Participants, account balances, and deduction totals for the following groups:

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State Active Employees and Satellite Account Employees. The report shall be delivered thirty (30) calendar days following the end of the previous month.

2. A monthly report providing MBE reporting per Appendix 4.

C. The Contractor shall provide quarterly reporting as noted below:

1. The Contractor shall self-report on each of the Performance Guarantee measurements as defined in Exhibit 5 to the State on a quarterly basis, in the format requested. Report Card shall be delivered in accordance with the timeline outlined in PG-6, in Exhibit 5-7.

2. Quarterly report that reflects all ineligible claims, the documented collection attempts, and the associated claims that have been offset.

3. Quarterly report for the Dependent Daycare FSA Utilization Tracking.

D. The Contractor shall provide annual reporting as noted below:

1. Annual settlement report, as required by PG-7 in "Exhibit 5-7."

2. Year-end report listing all employees with unrecovered overpayments for tax purposes, including unsubstantiated claims, provided ten (10) calendar days after Plan Year end (see PG-8 in Exhibit 5-7).

E. The Contractor shall provide ad hoc reporting flexibility to accommodate up to ten

(10) requests annually, at no additional charge. All ad hoc reporting will be in the form and format as requested by the State.

2.3.10 Claim Processing

A. The Contractor shall accept and assign a unique identification number (that is not a social security number) on all participant communications including claim forms, EOB's and quarterly statements. The Contractor shall maintain a cross-reference between a unique identifier number and the social security number.

B. The Contractor shall ensure timely, accurate and prompt processing of claims as well as payment of reimbursements utilizing unique identifiers for all participants.

C. The Contractor shall have procedures in place for recovery of payment errors identified by fraud…