Pricing Model for Health Insurance for Locally Employed (LE) Staff

Purpose:

The Regional Procurement Support Office (RPSO) Frankfurt is conducting market research to obtain industry feedback on the most appropriate pricing model for potential future requirements involving the provision of health insurance services for Locally Employed (LE) Staff at U.S. embassies and consulates overseas.

This Request for Information (RFI) is issued solely for information and planning purposes. It does not constitute a Request for Quotation (RFQ) or Request for Proposal (RFP), and the Government will not award a contract, pay for information submitted, or reimburse any costs associated with responding to this notice.

Background:

The Government anticipates that any resulting acquisition, if pursued, would likely utilize an Indefinite-Delivery, Indefinite-Quantity (IDIQ) contract vehicle. No actual requirement currently exists.

Request for Input:

The Government is seeking industry’s views, data, and recommendations regarding which pricing model would be most efficient, commercially reasonable, and actuarially fair for both parties under such an arrangement:

1. Firm-Fixed Price (FFP) with Economic Price Adjustment (EPA) in accordance with FAR 52.216-4, under which future-year pricing may be adjusted based on cost experience or other agreed indices. This is the currently used model, and it allows for annual adjustments to health insurance premiums based on the cost experience of the covered group. After the first twelve months, either the contractor or the U.S. Government may request a premium adjustment for the following contract year. The adjustment is determined by reviewing the contractor’s balance sheet for the previous period, which must detail receipts (premiums received), the number of insurance policies, and claims paid, broken down by premium type. The U.S. Government reserves the right to have an independent third party review these records. Any adjustment is subject to mutual agreement and will be formalized through a written contract modification. Adjustments are not retroactive and only apply to future contract years. If the parties cannot reach an agreement, the matter will be resolved under the contract’s Disputes clause; or

2. Firm-Fixed Price (FFP) with a profit-sharing formula, under which the contractor and the Government would share in cost savings or excesses based on an actuarially sound formula. For this option the Government specifically invites respondents to:
- Propose or describe actuarially fair profit-sharing formulas to include sample calculations, including definitions of loss ratios, thresholds, and refund or gain-sharing mechanisms; and
- Address how such arrangements comply with fiscal law constraints on obligating and expending appropriated funds.

3. Any other commercially proven pricing model(s). Describe how the model reduces administrative effort for both parties and demonstrate how it complies with fiscal law requirements governing the obligation and expenditure of appropriated funds. 

Response Instructions:

Interested parties are encouraged to provide concise written responses (not to exceed five pages) addressing the above points, including industry best practices, advantages, disadvantages, and administrative considerations.

Responses should be submitted electronically to the point of contact listed in this notice no later than the date specified in SAM.gov.

Disclaimer:

This RFI is issued solely for market research and does not obligate the Government to issue a solicitation or award a contract. Respondents are solely responsible for all expenses associated with responding.