REQUEST FOR PROPOSALS For
Flexible Spending Account Administrative Services
411 W. 1st St., Purchasing Room 100 Duluth, MN, 55802
The City of Duluth
Release Date: Proposal Must be Received No Later Than: Effective Date:
Friday, May 2, 2008
2:00 p.m., Friday, May 30, 2008 January 1, 2009
FSA – RFP Page 2
CITY OF DULUTH
TABLE OF CONTENTS
I.
Request for Proposal Notice
II.
Background and General Information
III.
Scope of Service
IV.
Proposal Evaluation Criteria
V.
Conditions and Stipulations
VI.
Vendor Organization Questionnaire
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REQUEST FOR PROPOSAL NOTICE
Notice is hereby given that the City of Duluth’s (the City) Purchasing Agent is hereby authorized to receive Proposals for the Flexible Spending Account Administrative Services until 2:00 p.m., Friday, May 30, 2008. All Proposals shall be clearly identified as Bid # 08-3002, Flexible Spending Account Administrative Services Proposal for the City of Duluth. Four copies of your Proposal should be forwarded to the City at the following address: City of Duluth Attn: Courtney Petersen, Purchasing Agent 411 W. 1st Street, Purchasing Room 100 Duluth, MN, 55802-1195 Please note that no formal opening of the proposals will take place. Proposals will be evaluated and the successful vendor(s) will be determined and approved by the City Council. The City reserves the right to reject any or all Proposals, waive formalities and to select the vendor, benefits and services that best meet the needs of the City and its employees. The City reserves the right to select and terminate any servicing agent, agency, company or administrator. Inquiries, clarification, or requests for Proposal forms and questionnaires by electronic mail should be directed by telephone or e-mail to the following contacts: Courtney Petersen Purchasing Agent Direct : 218/730-5340 E-mail : cpetersen@duluthmn.gov
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BACKGROUND AND GENERAL INFORMATION
The City of Duluth (the City) is seeking proposals for a Flexible Spending Account Administrator. The purpose of this Request for Proposals is to gather information from your organization relative to the City’s required scope of service and key selection criteria. Organizations selected as finalists may be expected to address more detailed issues regarding financial and other specifics of their organization and operations. These same finalists may be expected to participate in interviews with City staff. Currently, the City offers Flexible Spending Account benefits to its employees through a third-party administrator, SuperiorUSA. Following is a list of the services currently offered through our administrator: 1. Plan Documents and Summary Plan Descriptions; 2. Premium only Section 125 plan (pre-tax payment of medical and dental coverage premiums, salary reducing for purposes of medical and dependent daycare reimbursement); 3. Assistance with FSA Plan enrollment; 4. Support on technical issues and participant questions; 5. FSA administration for medical and daycare expenses including reimbursements by check. 6. Internet access to participant account information. The City is especially interested in obtaining the following services as part of the FSA administration: Ongoing administration of the premium only Section 125 plan; Qualified medical and dependent daycare reimbursement account administration, including: appeal and review, inquiries regarding reimbursable expense, and inquiries regarding exceptions to the irrevocable election rule, conduct the appropriate non-discrimination testing, proactive regarding overall plan compliance; Direct Deposit and Debit Card; Transportation Expense Reimbursement Account services; On-line account management tools for employees and the employer; and Service provider must be pro-active, as opposed to reactive, and customer service must be a priority.
The Flexible Spending Account benefit would be offered to all eligible City employees. The City will determine eligibility for employee participation in the FSA. The total number of employees eligible to participate in the FSA is approximately 800. Most employees are included in one of four collective bargaining units. All unions have bargained for this benefit.
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The City invites proposals from qualified organizations to administer its Flexible Spending Account Plan. Applicants are required to have a minimum of seven years of experience in administering this type of service. Experience with public entities (especially to Minnesota cities) is also desirable.
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SCOPE OF SERVICE
It is the City’s intent to enter into an agreement with the selected plan provider for administration of its FSA program. The “Plan Year” for the FSA program runs from January 1st through December 31st of each year during the term of any Agreement(s) resulting from this RFP. The City intends to make the selected plan provider’s services initially available to City employees effective January 1, 2009, and will publicize the selected plan provider’s services commencing with open enrollment scheduled for October 2008. The selected plan provider will agree to provide the maximum degree of support to the City in providing the services and achieving the timing of this implementation goal. Accordingly, the selected provider will respond to requests from the City promptly and responsively. Specifically with respect the FSA program services, the selected firm will: 1. Provide a designated representative who is knowledgeable about all aspects of the FSA program and is always accessible by phone, email or page during regular working hours to address emergency or non-emergency issues posed by the City’s Human Resources office. 2. Provide the City’s Human Resources office with access to expertise within the selected plan provider that can effectively address all legislative and legal questions regarding FSA program accounts and pertinent tax laws. 3. Administer both the medical and dependent daycare flexible spending accounts. 4. Use an annual minimum/maximum of $100/$5,000 for the medical reimbursement account and $100/$5,000 for the dependent daycare reimbursement account. Each married participating FSA employee filing separately may use an annual maximum of $2,500. 5. Review and make the appropriate changes to the existing Plan Document to be provided by the City. 6. Receive employee’s election forms via hard-copy, electronic transfer or on-line through the selected plan provider’s website during open enrollment and establish spending accounts in the selected plan provider’s system for each participating FSA employee. 7. Mail confirmation notices and information on allowable expenses to the homes of participating FSA employees. This may be done via email when the participating FSA employee provides an email address. 8. Receive information regarding participating FSA employees pre-tax payroll deductions, terminations, and leave status via hard-copy, email, or electronic file.
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9. Perform all claims processing functions, including verification of proper documentation of the expense, screening for duplicate payment, calculation of reimbursement due and payment directly to the participating FSA employee. 10. Provide optional use of a debit card for participating FSA employees enrolled in a medical reimbursement account. 11. If a claim is denied, immediately mail a letter to the participating FSA employee explaining why the claim was denied. If a participating FSA employee submits a reimbursement request for more than one expense and only one expense is denied, the participating FSA employee will be reimbursed for all approved eligible expenses and the denied expense will be placed in a hold or “pending” status. 12. Mail a notice by November 1st of each year reminding participating FSA employees that the Plan Year is coming to a close and that qualifying expenses must be incurred during the Plan Year to zero out their account. For participating FSA employees enrolled in the FSA program on the last day of the plan year, use December 31st as the last date of service for incurred eligible claims. The selected plan provider will also mail notices no later than February 1st to participating FSA employees who have balances on that date during the run-out period ending March 31st. 13. Pay claims bi-weekly. Although the City would consider the option of weekly reimbursements to participants. 14. Provide reimbursement checks and the distribution ledger to the City of Duluth’s Treasury Dept. The Treasury Dept. will review the ledger and the total amount on the check run in order to transfer funds to the designated bank account on the same day. 15. Review the option to allow participating FSA employees to have their reimbursements directly deposited into a checking or savings account. If a participating FSA employee does not choose the direct deposit option, the reimbursement checks will be mailed by the City of Duluth’s Treasury Dept. to the participating FSA employee’s home. 16. Any dependent daycare amounts that are unpaid due to expenses exceeding the amount in the account at the time of the claim should be automatically paid as money accumulates in the dependent daycare account without resubmission of the unpaid claim. 17. Use March 31st of each year as the run-out period at the end of each Plan Year to submit for reimbursement.
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18. Process claims simultaneously for different Plan Years. All reporting will be broken out by each Plan Year. 19. Receive balances from prior TPA for calendar year 2008 participating FSA employees and administer claims submitted during the run-out period through March 31st. 20. Provide online access to City of Duluth’s Human Resources and Payroll Departments to review FSA contributions and payments for each participating FSA employee. 21. Provide the City with an administrator’s manual detailing the selected plan provider’s administrative procedures in operating the FSA program. 22. Accept information from the City’s payroll system and seamlessly transfer participating FSA employee contributions to their account throughout the course of the Plan Year. For example, when a participating FSA employee changes jobs or unions, anywhere within the City, their account should consistently contain accurate election amounts, year-to-date (YTD) deposits, and YTD withdrawals before and after the transfer. Accordingly, no termination date will appear in the account due to a transfer within the City’s unions. 23. Provide a toll-free number to participating FSA employees that is available 24 hours per day and provides direct telephone access to the participating FSA employee’s medical reimbursement account and/or dependent daycare reimbursement account information. 24. Provide a toll-free number to participating FSA employees who want to speak with a customer service representative (not a recording) that is available at least 10 hours per day. 25. Provide a toll-free number to participating FSA employees that is available 24 hours per day to receive claims. 26. Provide online access to participating FSA employees so they can view their specific account information as well as general plan rules, supporting documents and claim forms. 27. Provide account access regarding participating FSA employees to the selected plan provider’s customer service representatives so they can answer questions from participating FSA employees regarding paid, pending and denied claims. 28. Produce hard copies of the following monthly reports to be sent or emailed to the City:
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a. b. c. d.
Payroll Deduction Report (Contribution Report) Check Register Report (Payment Report) Plan Balances Report Forfeiture Report
29. Provide participation reports for both the medical reimbursement account and the dependent daycare reimbursement account plans. 30. Perform annual discrimination testing for the FSA program using information from the City of Duluth’s payroll system.
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PROPOSAL EVALUATION CRITERIA
The City will evaluate proposals based on the needs of the City and its employees. The following criteria will be used in evaluating each of the vendor responses: 1. The plan provider’s ability to assist the City in meeting its goals for administration of the FSA program as discussed in the Background and General Information and Scope of Service sections; 2. The plan provider’s relevant experience, qualifications and success in providing the services outlined in this RFP; 3. The plan provider’s references from public employers/institutions and clients which are comparable to the City; 4. The plan provider’s financial proposal including but not limited to discounts, service charges and other charges; 5. The quality of the proposal, specifically, responsiveness to requirements and adequacy of information provided; 6. The contractual terms which would govern the relationship between the City and the selected plan provider; 7. Compliance with applicable State and Federal laws and regulations; 8. Ability for plan provider to show compliance with the Health Insurance Portability and Accountability Act (HIPAA) Administrative Simplification Standards (including, but not limited to, a properly executed business associate agreement); 9. Financial position of the plan provider; 10. Any other criteria identified by the City as important in evaluation of submitted proposals. The City will choose the proposals that best fits its needs and the needs of employees and their family members. The City is not obligated to award the contract based on cost alone.
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CONDITIONS AND STIPULATIONS
You are invited to submit your Proposal for FSA administrative services based on the information contained in this Request for Proposal. Unless a specific note is made to the contrary, we will assume that your Proposal conforms to the City’s Specifications. You are invited to ask questions during the proposal process and to seek additional information, if needed. We want this to be an interactive process and will make every effort to provide sufficient data for your response.
The City will look to contract with a vendor that provides the most efficient
administrative service to the City and its employees. The services provided should address the needs among City employees. Some areas of interest include (but are not limited to) Transportation Expense Reimbursement Account services;
The City reserves the right to accept or reject any or all proposals and to waive
formalities and select the carrier and benefit options that best meet the needs of the City and its employees. The City’s objective is to select a vendor who will provide the best possible service at the best possible cost while meeting the Request for Proposal specifications. The City is not obligated to award the contract based on cost alone.
Any proposed deviations to any part of these Specifications must be submitted in
writing as a part of the questionnaire, and clearly identified in the appropriate section of the Proposal. Any deviation deemed to be significant by the City will disqualify the Proposal. Failure to identify any such deviation(s) shall not in the future accrue to the disadvantage of the City or any qualified participant or dependent in any manner.
The vendor awarded the business shall submit properly executed contracts and
Business Associate Agreements to the City within sixty (60) days of the plan effective date. The vendor awarded the business shall be required to provide reports on a monthly basis (weekly in some instances) for purposes of ongoing evaluation of the program. Employees (that terminate their employment for any reason) must be given the option to continue FSA participation per state mandates and federal COBRA regulations. Such coverage shall not be contingent upon the City’s coverage continuing with the FSA vendor.
FSA – RFP Page 12 All Providers must be in full compliance with Minnesota and Federal requirements relating to the requested coverage or administration of such benefits, including (but not limited to) state and federal privacy requirements. The City will work closely with the selected vendor to promote the FSA to employees and their family members. An account representative must be available to the City on an on-going basis. The City will determine eligibility for participation and access to the FSA. With respect to inquiries regarding the City’s policies and procedures, the FSA vendor shall act only in the role of administrator and not provide legal advice against the City to the employee. The selected vendor shall refer any inquiries relating to potential legal claims against the City to the City Administrator.
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VENDOR ORGANIZATION QUESTIONNAIRE
Note: A complete response to this questionnaire must accompany all Requests for Proposals. A response such as “See Proposal” is not sufficient unless there is proper reference to the specific section of the proposal addressing the question. Please be specific in your answers. Deviations 1. Does your Proposal contain any deviations from the benefits, general conditions, stipulations or other provisions of the Specifications? If yes, provide details in a separate cover letter. Otherwise, confirm that you have responded according to Proposal conditions.
Fees 1. Are the fees quoted in this Proposal firm and guaranteed for the term of the contract?
2. Provide the per-employee cost to administer services described within the proposal.
3. Are additional services available beyond what is described within this RFP and/or your proposal? If so, what are the fees for these services?
4. Is this Proposal tied to any other benefit offer (e.g. the FSA is only available if the City also purchases COBRA administration through the vendor)?
Implementation / Eligibility 1. Are any employee orientation sessions included in the fees being proposed? If so, how many sessions are you recommending we conduct? 2. Will any information be sent to employees to help promote the FSA program? If so, when? 3. How much notice must the City provide if they wish to terminate or non-renew its contract through your company/organization? Describe your termination or nonrenewal policy.
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Administration and Member Services 1. Describe the range of both administrative and member services provided by your organization.
2. Describe the training and employee communication strategy that would be used to educate City employees about the services available.
3. Who will be responsible for assisting the City with rolling out the services and marketing to employees and their family members? Contact Name: Contact Phone Number:
4. Who will assist the City with ongoing administration (i.e. account management)? Contact Name: Contact Phone Number:
5. Who will assist the City with ongoing questions or issues? Contact Name: Contact Phone Number:
6. Describe how you will handle, process and reply to employee inquiries. Include whether or not you provide a toll free number and if there is 24-hour access to FSA account information.
7. Does the plan comply with all State and Federal mandates, including COBRA and HIPAA? If no, please explain. Please provide copies of pertinent policies and procedures relating to these requirements.
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8. Does your organization outsource administration for any of the services you provide? If so, please explain and identify the other vendors that would be providing services to our employees.
9. In addition to the standard reports presented with your Proposal, do you provide any additional reports upon request? Is there a charge? If yes, please provide additional cost.
10. Are there any reports you will not provide to the City? If so, please describe.
11. What education services (i.e. communications, etc.) will you provide and at what cost?
Company Overview 1. What experience has your company had with public sector entities?
2. How long has your company been doing business in Minnesota?
3. Briefly indicate the main attributes that differentiate your company from your competitors.
4. Is your company a subsidiary or affiliate of another company? If yes, please explain and provide full disclosure of any direct or indirect ownership or control by any administrative service agency.
5. Describe any pending arrangements to merge or sell your company.
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6. Provide the names and telephone numbers of five (5) clients in the State of Minnesota with whom you have had a working relationship, as a reference for the City. Include the number of participants for each group. (Preferably, the references should be governmental units.) Include two groups that recently terminated coverage.
_______________________________ Signature (Provider Representative) _______________________________ Company _______________________________ Telephone Number
_______________________ Title _______________________ Date