Vision Insurance Plan Administration for CSC

The State of Michigan Civil Service Commission Employee Benefits Division issued Request for Proposal No. 180000001030 for Administrative Services Only (ASO) vision insurance plan administration services. The procurement seeks a qualified Third-Party Administrator (TPA), insurance carrier licensed in Michigan, or non-profit health care corporation to administer comprehensive vision benefits for approximately 198,835 members, including 45,294 active employees, 55,734 retirees, 97,243 dependents, and 564 COBRA participants. The contractor must provide full plan administration encompassing claims processing, provider network management through the VSP Choice Network, member communications, enrollment and eligibility management, identification card production and distribution, customer service call center operations, financial reporting, auditing, and compliance with HIPAA requirements. Deliverables include implementation of the current plan design covering routine eye exams, eyeglass frames and lenses, contact lenses, and specialized benefits such as computer glasses and safety eyewear for active employees, with differentiated benefit levels for participating and non-participating providers. Key objectives include maintaining service level agreements with specific performance standards including 95 percent of calls answered within 30 seconds, 100 percent of identification cards mailed within 10 calendar days, and 95 percent member inquiry resolution within five business days, with performance-based penalty structures ranging from 1.0 to 5.0 percent of monthly administrative fees for non-compliance. Required qualifications include proper licensure as a TPA or insurance company in Michigan, demonstration of financial strength through A.M. Best ratings or equivalent, current SSAE No. 16 or SAS-70 audit results, and compliance with all state and federal data security requirements including HIPAA, the Michigan Identity Theft Protection Act, and NIST standards. The proposal deadline was March 12, 2018 at 1:50 p.m. Eastern Time, with bidder questions due February 22, 2018; the contract is effective May 10, 2018 through September 30, 2021, with an unpaid implementation period from May 10 through September 30, 2018, and operational services commencing October 1, 2018. Evaluation criteria include technical proposal requirements weighted at 100 points, with proposals scoring 80 or higher advancing to price evaluation, based on Schedule A requirements (60 points), staffing qualifications (10 points), project management and invoice procedures (15 points), and vendor background and experience (15 points).

There are no indicated set-asides or restrictions limiting eligible organizations beyond the required licensure and financial strength credentials; however, the RFP requires vendors to be statutorily authorized to provide administrative services in Michigan. The incumbent contractor is VSP, and the self-funded plan currently operates under VSP's administration at an Administrative Services Only fee of $0.50 per contract per month (approximately $49,150 to $49,622 monthly based on 2016-2017 enrollment data). Bidders must integrate with the existing VSP Choice Network provider infrastructure and support HIPAA 834 electronic data interchange file formats for enrollment and benefits administration. The State maintains comprehensive data security requirements outlined in Schedule J, including mandatory annual SSAE16 audit certifications, encryption standards of 128-bit minimum, cloud solution approval requirements with FISMA compliance and FedRAMP certification, and extensive incident response and business continuity planning protocols. Pricing is structured on an annual Per Contract Per Month (PCPM) basis for administrative services plus repriced claims costs based on fiscal years 2016 and 2017 data, with contractors required to submit comprehensive pricing proposals covering all three contract years through September 30, 2021, including all implementation costs absorbed by the contractor during the unpaid transition period; specific award values are not disclosed in the solicitation documents, though current monthly administrative costs and historical fiscal year 2017 claims data totaling $102,909.35 across 796 vision plan participants provide baseline reference points for proposal evaluation.