REQUEST FOR PROPOSAL
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The Texas A&M University System
Office of Risk Management and Benefits Administration
REQUEST FOR PROPOSAL
RFP Number: RFP 01 RSK-11-006
Group Long Term Disability Insurance
PROPOSAL MUST BE RECEIVED BEFORE:
4:00 p.m. Central Time on March 15, 2011
MAIL OR HAND DELIVER PROPOSAL TO:
Attention: Don Barwick
HUB and Procurement Programs
The Texas A&M University System
200 Technology Way, Suite 1273
College Station, Texas 77845-3424
Show RFP Number on Response Envelope
NOTE: PROPOSAL must be time stamped at The Texas A&M University System Office of HUB & Procurement Programs before the hour and date specified for receipt of proposal.
All proposals shall become the property of the State of Texas upon receipt. Proposals may be subject to public review after contracts have been awarded. VENDORS responding to this proposal are cautioned not to include any proprietary information as part of their proposal unless such proprietary information is carefully identified as such in writing, and the SYSTEM accepts, in writing, the information as proprietary. Notwithstanding the foregoing, the SYSTEM is subject to the Texas Public Information Act.
REFER INQUIRIES TO:
Don Barwick
The Texas A&M University System
Email: Dbarwick@tamu.edu
Fax: (979) 458-6410
Table of Contents
SECTION 1 – DEFINITIONS……………………………………………………………………………………… 4
1. Definitions………………………………………………………………………………………………. 4
SECTION 2 – INTRODUCTION…………………………………………………………………………………. 5
1. Scope of Proposal Overview……………………………………………………………………………. 5
2. The Texas A&M University System……………………………………………………………………. 5
3. Benefit Philosophy………………...……………………………………………………………………. 7
SECTION 3 – INSTRUCTIONS TO PROPOSERS …………………………………………………………… 8
1. Schedule of Proposal Process…………………………………………………………………………… 8
2. Schedule of Implementation……………………………………………………………………………. 8
3. Period of Performance…………………………………………………………………………………. 9
4. Qualifications of Proposers…………………………………………………………………………….. 9
5. Non-Discrimination…………………………………………………………………………………..… 9
6. Proposal Format…………………………………………………………………………........…………. 9
7. General Instructions……………………………………………………………………………………... 12
8. Contract Documents.………..………………………………………………………………………….... 15
9. Eligibility………………………………………………………………………………………………... 15
10. Communications and Enrollment…………………………………………………………………….…. 15
SECTION 4 – FUNDING…………………………………………………………………………………………… 16
1. Current Funding……………………………………………………………………………………….… 16
2. Reserve Arrangements and Premium Stabilization Fund…………………………………………….….. 16
SECTION 5 – GENERAL ADMINISTRATION…………………………………………………………………. 16
1. Required Services……………………………………………………………………………………….. 17
SECTION 6 – GROUP LONG TERM DISABILITY INSURANCE………………………………………….. 17
1. Plan Background………………………………………………………………………………………....17
2. Current Enrollment……………………………………………………………………………………… 17
6.3 Plan Design ………………………………………………………………………………………………17
4. Coverage Costs………......……………………………………………………………………….……... 18
5. Continuity of Coverage ………………………………………………………………………………… 18
6.6 Additional Options ………………………………………………………………………………………19
SECTION 7 – EVALUATION OF PROPOSALS………………………………………………………………... 23
7.1 Evaluation Information…………………………………………………………………………………. 23
7.2 Evaluation Criteria and Weights………………………………………………………………………… 23
EXHIBIT A – EXECUTION OF OFFER……………………………………………………………………… 21
EXHIBIT B – COMPANY PROFILE…………………………………………………………………………….. 23
EXHIBIT C – SUPPLEMENTAL FILE. ………………………………………………………………………… 25
EXHIBIT D – QUESTIONNAIRE....... …………………………………………………………………………… 26
EXHIBIT E – ADMINISTRATIVE AGREEMENT...…………………………………………………………… 31
EXHIBIT F – PLAN DESIGN HISTORY ..……………………………………………………… …….................36
EXHIBIT G – EXPERIENCE ........... ..…………………………........…………………………… ……................38
EXHIBIT H –PARTICIPATION ................ ..……………………………………………………… …….............39
SECTION 1 – DEFINITIONS
1. Definitions
The following provides a definition of acronyms and abbreviated phrases used throughout this document.
A&M System – The Texas A&M University System
HIPAA – Health Insurance Portability and Accountability Act
HSP – Historically Underutilized Business Subcontracting Plan
HUB – Historically Underutilized Business
IBNR – Incurred but not Reported
LTD – Group Long Term Disability Insurance
PEPM – Per Employee Per Month
Proposer – the individual, partnership, corporation, or other entity responding to this RFP
RFP – Request for Proposal
SEBAC – System Employee Benefits Advisory Committee – An advisory committee made up of representatives from each System Member, retired employee representatives, and ex-officio members. Meetings are held several times per plan year between September and May. The conclusions of the committee are forwarded as recommendations to the Director of Risk Management and Benefit Administration for consideration.
SMM – Summary of Material Modifications
SPD – Summary Plan Description
System Members - The A&M System is composed of eleven academic institutions, seven state agencies, and a comprehensive health science center located throughout the State of Texas. The System Offices (headquarters) for the A&M System are located in College Station.
SECTION 2 – INTRODUCTION
2.1 Scope of Proposal Overview
The A&M System is interested in receiving responses to its request for proposals from qualified vendors to provide claims and network administration services for its group long term disability insurance for the upcoming plan year, beginning September 1, 2011. The A&M System desires proposals that represent the best combination of quality and cost efficiency.
The A&M System currently contracts with MetLife to provide a fully-insured LTD plan. This vendor is in the fifth year of providing these services. The A&M System is required by law to rebid contracts at least every six years.
Proposers may link to the System Benefits Administration website at to view the details of the current LTD plan offered by the A&M System.
This RFP provides detailed information about the A&M System and its benefit needs and provides the required format for the vendor’s response. Deviations from the specifications outlined are not anticipated; although the A&M System will consider any such deviations that it deems to be in its best interest.
2.2 The Texas A&M University System
The A&M System is one of the largest and most complex systems of higher education in the nation. Through a statewide network of eleven universities, seven state agencies and a comprehensive health science center, the A&M System educates nearly 120,000 students, conducts more than $730 million in research and reaches another 22 million people through service each year. The A&M System is governed by a Board of Regents appointed by the Governor. Currently serving on the board are:
Morris E. Foster, Chairman Salado term expires 2013
James P. Wilson, Vice Chairman Sugar Land term expires 2013
Phil Adams Bryan term expires 2015
Lupe Fraga Houston term expires 2011
Jim Schwertner Austin term expires 2015
Ida Clement Steen San Antonio term expires 2011
Gene Stallings Powderly term expires 2011
Richard A. Box Austin term expires 2013
Cresencio Davila, Student Regent San Antonio term expires 2011
John D. White Houston term expires 2015
With approximately 35,200 benefit-eligible employees and retired employees located throughout the State, the A&M System provides leadership in academics, research and public service directed toward serving Texas and Texans. The System Members are briefly described as follows:
1. System Offices are responsible for providing leadership and establishing general policies and procedures for the effective administration of the A&M System and its member institutions and agencies and is located in College Station, Texas.
2. Prairie View A&M University is a general academic institution established in 1874 and is located in Prairie View, Texas.
3. Tarleton State University is a general academic institution established in 1917 and is located in Stephenville, Texas.
4. Texas A&M International University is a general academic institution established in 1969 and is located in Laredo, Texas.
5. Texas A&M University is the land, sea and space grant university of Texas established in 1876 and is located in College Station, Texas. Texas A&M University at Galveston is a component of Texas A&M University and serves as a special purpose institution for instruction in naval sciences and marine resources.
6. Texas A&M University-Commerce is a general academic institution founded in 1889 and is located in Commerce, Texas.
7. Texas A&M University-Corpus Christi is a general academic institution located in Corpus Christi, Texas.
8. Texas A&M University-Kingsville is a general academic institution established in 1925 and is located in Kingsville, Texas.
9. Texas A&M University – Central Texas formerly a system center offered through Tarleton State University, located in Killeen, Texas, became a stand-alone university in 2009.
10. Texas A&M University – San Antonio operated as a system center under Texas A&M Kingsville for nine years until receiving stand-alone status in 2009.
11. The Texas A&M University System Health Science Center was established in 1998 and includes the following A&M System institution: Baylor College of Dentistry, College of Medicine, Graduate School of Biomedical Sciences, Institute of Biosciences and Technology and School of Rural Public Health.
12. Texas A&M University-Texarkana is a general academic institution founded in 1971 and located in Texarkana, Texas.
13. West Texas A&M University is a four-year general academic institution founded in 1910 and is located in Canyon, Texas.
14. The Texas Agricultural Experiment Station is the state’s agricultural research agency founded in 1887 and is headquartered in College Station with major Research & Extension Centers in Amarillo, Beaumont, Corpus Christi, Dallas, El Paso, Lubbock, Overton, San Angelo, Uvalde, Vernon, and Weslaco. Smaller stations are located throughout Texas.
15. The Texas Cooperative Extension is the state’s agricultural service agency and also includes the Texas Animal Damage Control Service. The Texas Cooperative Extension is headquartered in College Station with offices in each county seat and regional offices located in strategic Texas cities.
16. The Texas Engineering Experiment Station is the state’s engineering research agency established in 1914 and is headquartered in College Station.
17. The Texas Engineering Extension Service is the engineering service agency responsible for providing occupational and technical training to the citizens of Texas and is headquartered in College Station, but conducts classes at facilities and customer locations across the state, the nation and the world.
18. The Texas Forest Service is responsible for forestry within the State of Texas, including the prevention of forest fires, enforcement of forestry laws, collection of forestry data and forestry research. The Texas Forest Service was organized in 1915 and is headquartered in College Station with additional offices located throughout Texas.
19. The Texas Transportation Institute is a research agency charged with developing and refining transportation systems available in Texas. Created in 1950, the Texas Transportation Institute is headquartered in College Station, Texas with offices in Dallas, Arlington, Austin, San Antonio and Houston.
20. The Texas Veterinary Medical Diagnostic Laboratory is the state diagnostic laboratory serving the veterinary and livestock industries in Texas. Established in 1967, it is headquartered in College Station with offices located throughout Texas.
The programs addressed by this request for proposal is available to all System Members. The authority to plan, implement and control the A&M System’s benefit programs has been assigned to the Director of Risk Management and Benefits Administration. The Employee Benefits Manager, reporting to the Director of Risk Management and Benefits Administration, has the responsibility for the design and development of System-wide benefit plans, and for the operation and administration of existing benefit programs.
System Benefits Administration staff monitors plan experience, negotiates carrier contracts, maintains official records, and ensures quality, efficiency, and statutory compliance in the programs through regular review and audits. It is the responsibility of each System Member to inform employees and retirees of their benefit eligibility, advise them about options and perform enrollment and counseling functions. These activities are usually performed in the Human Resource and/or Payroll departments of each System Member.
2.3 Benefit Philosophy
The A&M System is committed to providing eligible employees, retired employees and their dependents access to group benefit plans of the highest quality at the lowest possible cost to the A&M System and to its employees. The manner in which the programs are funded demands strict containment of costs in order to maximize benefits for the beneficiaries. Generally, all optional coverages are paid in full by the participants on a payroll deduction.
The A&M System currently maintains its benefit plans on a fully-insured basis. As an agency of the State of Texas, no premium tax is levied against the group.
None of the plans for which proposals are being sought are ERISA plans, however, for the most part, we do comply with ERISA.
The A&M System’s benefit programs are viewed as an important part of the total compensation package. It is expected that the benefits offered will attract new employees and promote the retention of career employees. Therefore, superior quality and responsiveness to participants’ needs are essential. The A&M System is seeking vendors who offer services with the best combination of excellence, flexibility and low cost.
One tool to provide the A&M System administration with a continuous evaluation of benefit plans is SEBAC. SEBAC consists of representatives of each System Member, retired employee representatives, and ex-officio members. Meetings are held several times per plan year between September and May. The conclusions of the committee are forwarded as recommendations to the Director of Risk Management and Benefits Administration for consideration or action.
SECTION 3 – INSTRUCTIONS TO PROPOSORS
3.1 Schedule of Proposal Process
February 14, 2011 RFP available for download by potential proposers
February 25, 2011 Last day the A&M System will accept questions from potential proposers
March 4, 2011 The latest the A&M System will provide a response to questions
March 15, 2011 Written proposals received by 4:00 p.m., CST. Proposal should be sent to:
Mr. Don Barwick
HUB and Procurement Programs
The Texas A&M University System
200 Technology Way, Suite 1273
College Station, TX 77845-3424
March 31, 2011 Finalist Notifications
April 14, 2011 Oral presentations by selected finalists
April 29, 2011 Notification to selected proposer
3.2 Schedule of Implementation
April 29, 2011 Notification to selected proposer
No later than May 13, 2011 First draft of the group policies, riders, group certificates, administrative agreement, and any other legal documentation required provided in electronic format for review and edits.
July 2011 Summary Plan Descriptions written and edited by the A&M System and submitted to carrier with format and printing specifications
June 15, 2011 Enrollment information materials finalized and mailed by the A&M System
July 1 – July 31, 2011 Annual Enrollment period for all A&M System employees and retirees for September 1, 2011 effective date
July 31, 2011 All documents necessary for claim processing and Summary Plan Descriptions available
August 1, 2011 Administrative agreement, group policy, riders, HIPAA agreement (if applicable) and any other required legal documentation completed and signed by both parties
August 25, 2011 Plan documents mailed by carrier
September 1, 2011 Effective date of plan
3.3 Period of Performance
Performance under a contract pursuant to this RFP will commence on September 1, 2011. The maximum period of performance pursuant to this RFP ends August 31, 2017. Benefit schedules, administrative fees, and management arrangements must be guaranteed under the contract for a period of three years. A renewal extension may be made pending successful rate and fee negotiations.
3.4 Qualifications of Proposers
All entities responding to this RFP must certify in Section h of the response that they are licensed to do business in the State of Texas and permitted to contract with the State or any of its subdivisions. In addition, all entities must be able to demonstrate sufficient financial stature and operational capacity to accommodate the needs of the A&M System.
The organization must also certify in Section h that it is in good stead with the Texas Department of Insurance (TDI) and disclose any actions that are pending or in process with TDI.
3.5 Non-Discrimination
All entities responding to this RFP must certify against discriminatory organizational practices and must agree to indemnify and hold the A&M System harmless in the event of any claims, demands, or judgments relating thereto (see Section 3.6 h).
3.6 Proposal Format
The A&M System will not consider a proposal unless six copies, three hard copies and three electronic (CD) copies of the proposal are received no later than 4:00 p.m. CST, March 15, 2011. The package containing the proposal must be clearly marked “GROUP LONG TERM DISABILITY”. All proposals must be submitted according to the following guidelines:
• Hard copies of the proposals should be contained in a loose-leaf, three-ring notebook with the name of the proposing organization, RFP number, and “Group Long Term Disability” on the front and spine of the notebook cover.
• The name of the proposing organization, RFP number, and “Group Long Term Disability” should be written across the front of each CD. The CD should be placed in a sealed envelope with the same identifying information written across the front of the envelope, and attached or affixed inside the front cover of each notebook.
• Electronic copies must be in Word or PDF, unencrypted, and non-password protected format.
• All proposals must include Sections a through o as described below. Each of these divisions of the notebook must be separated by index tabs titled to match each of the underlined titles in a through o below, i.e. “a. Contact Information.”
Proposers are instructed to respond using the proposal format included in this RFP in order to expedite analysis and comparison of proposals received. Failure to use the stated format or failure to provide complete responses, may, at the A&M System’s option, disqualify the proposer.
A complete proposal will consist of the following:
a. Contact Information – Provide a contact name for this RFP response, including title, address, telephone number, facsimile, and email address.
b. Execution of Offer – Responses to the proposal must include an Execution of Offer provided in Exhibit A and should be completed and signed by one or more duly authorized officers having the authority to legally bind and commit the proposing organization.
c. Company Profile – Complete the Company Profile Questionnaire provided in Exhibit B by providing your answer in the shaded field following each question.
d. Organizational Chart – Provide an organizational chart identifying the chain of authority through the company’s CEO for this account. Include names, addresses, titles, email addresses, and telephone numbers for each individual.
e. Staffing – Describe the staff involved in the management of this group account. Include names, titles, addresses, email addresses, and brief biographies of the following individuals or their organizational equivalents who will be assigned to the A&M System account(s):
• Chief account executive for major group accounts
• Regional executive
• Service representative, if different from above
• Account underwriter
• Senior claim executive (level above claim manager)
• Contract consultant
• Communications manager
f. Installation Team Staffing – Describe the installation team and provide the names, titles, addresses, email addresses, and brief biographies of any individuals who are not included in e above.
g. References –
• Provide the name, address, email address and telephone number of the primary contact at three public entities or corporations and three major universities of similar size and with decentralized administration that are current clients of your company.
• Provide two references for the individual who will have primary responsibility for this account.
• Provide the name, address, email address and telephone number of the primary contact at two large accounts that have cancelled their coverage with your organization within the past year.
The Proposer’s response to this requirement officially authorizes the A&M System to contact these organizations to discuss the services and other considerations which the Proposer has provided to such organizations and authorizes the organizations to provide such information to the A&M System and Proposer shall and hereby does release and hold harmless the A&M System, the state of Texas, and the organization of any and all liability whatsoever, in connection with providing and receiving all such information.
h. Certification
• Certify that the proposing organization is licensed to offer the group insurance contracts in the State of Texas for which it is submitting proposals and is legally able to contract with the State or any of its subdivisions.
• Certify that the organization is in good stead with the Texas Department of Insurance (TDI) and disclose any actions that are pending or in process with TDI.
• Certify that no commissions, broker or finders fees are included in the quoted fees/premiums or will be paid to any individual, agency or company, if your company is selected to provide coverage for the A&M System.
• Certify that enrollment of any employee, retired employee, or dependent of the A&M System will not be limited or discouraged by “quota” or other restriction.
• Certify against discriminatory selection or segregation of the total group of eligible employees, retired employees, and dependents of the A&M System by excluding, or seeking to exclude, or otherwise discriminating against any of the following classes:
• Women: Title VII of the Civil Rights Act of 1964, as amended; Executive Order 11246 of 1965, as amended
Pregnant Women: Pregnancy Discrimination Act of 1978, PL95-555
• Racial Minorities: Title VII of the Civil Rights Act of 1964, as amended
• Aged and Retired: Age Discrimination in Employment Act of 1967, as amended; Tax Equity and Fiscal Responsibility Act of 1983 (TEFRA); Deficit Reduction Act of 1984 (DEFRA); Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA)
• Disabled Individuals and those with catastrophic and terminal diseases: Sections 503 and 504 of the Rehabilitation Act of 1973, Americans with Disabilities Act of 1990
i. Subcontractors – Identify any subcontractors who will be used on the project, stating the specific service they will provide and their qualifications.
It is the policy of the State of Texas and the A&M System to encourage the use of Historically Underutilized Businesses (HUBs) in our prime contracts, subcontractors, and purchasing transactions. The goal of the HUB program is to promote equal access and equal opportunity in A&M System contracting and purchasing.
Subcontracting opportunities are not anticipated for this RFP and therefore a HUB Subcontracting Plan (HSP) is NOT required.
However, if a subcontractor will be used to provide any services, the Proposer WILL BE required to make a good faith effort and complete the State of Texas HSP. In the event that you determine you will be using a subcontractor, please contact Mr. Don Barwick from the A&M System’s HUB Office at (979) 458-6410 or dbarwick@tamu.edu for assistance in determining available HUB subcontractors and proper completion of the HSP. The HSP, if applicable, should be included in Section i.
j. Proposed Coverage – This section should include the questionnaire found in Exhibit D and supporting documentation. Your proposed coverage should be based on the current plan design as described in Section 6.3.
k. Deviations – List any items in your proposal response that deviate from the RFP.
l. Confidential and Proprietary Information –In order to protect and prevent inadvertent access to confidential information submitted in support of its proposal, the Proposer is to provide a schedule of all pages that the Proposer in good faith, and with legally sufficient due diligence, considers to contain any confidential and/or proprietary information.
Information in any tangible form which is submitted by Proposers will be treated as confidential until such time as a contract is executed. After that time, the A&M System is required to provide access to certain records in accordance with the provisions of Chapter 552, Tex. Gov’t Code, and the Texas Public Information Act (TPIA), formerly known as the Open Records Act. By submitting a Proposal, the Proposer acknowledges and agrees that the A&M System shall have no liability to the Proposer or to any other person or entity for disclosing information in accordance with the TPIA. The A&M System shall not have any obligation or duty to advocate the confidentiality of the Proposer’s material to the Texas Attorney General or to any other person or entity. The Proposer further understands and agrees that upon the A&M System’s receipt of a TPIA request for a copy of the contract, including the proposal and any exhibits to the contract and proposal, the only documents that the A&M System shall treat as the Proposer’s confidential and proprietary information shall be the documents the Proposer identifies as required above. It is the Proposer’s sole obligation to advocate in good faith the confidential or proprietary nature of any information it provides in its proposal, and the Proposer understands that the Texas Attorney General may nonetheless determine that all or part of the claimed confidential or proprietary information shall be publicly disclosed.
In addition, the Proposer specifically agrees that the A&M System may release the Proposer’s entire Proposal, including alleged confidential or proprietary information, upon request from individual members, agencies or committees of the Texas Legislature where needed for legislative purposes, as provided for in the TPIA or to any other person or entity as otherwise required by law.
m. Alternative Plan Design – The response to this RFP should be based on the same benefit design for the LTD plan that is currently in place. If you would like to provide an alternate offer based on your recommended plan design changes, provide that information and pricing with your rationale for doing so in this section.
n. Supplemental Information – Information or exhibits provided that are not specifically requested in Sections a through m above should be included at the end of the proposal behind an index tab entitled “n. Supplemental Information”.
o. Additional Option - We are considering the possible addition of Critical Illness Coverage to the plan.
Please include information regarding whether your company offers Critical Illness Coverage – a provision that pays a lump sum benefit upon diagnosis of a covered critical illness. Indicate whether it could be offered as part of the LTD plan or as a separate plan and include a comprehensive description, as well as premium information.
3.7 General Instructions
1. Each proposal shall be prepared simply and economically, providing a straightforward and concise description of the Proposer’s ability to meet the requirements of this RFP. Emphasis shall be on completeness, clarity of content and responsiveness to the offer requirements.
2. Proposals must be valid for a minimum of 180 days from the submittal deadline date to allow time for evaluation, selection, and any unforeseen delays.
3. The Proposer agrees to protect the State from claims involving infringement of patents or copyrights.
4. Proposer agrees that Proposer and Proposer’s employees and agents are independent vendors and have no employer-employee relationship with the A&M System. The A&M System shall not be responsible for the Federal Insurance Contribution Act payments, federal or state unemployment taxes, income tax withholding, Workers’ Compensation Insurance payments, or any other insurance payments, nor will the A&M System furnish any medical or retirement benefits or any paid vacation or sick leave.
5. Any agreement resulting from this RFP shall be construed and governed by the laws of the State of Texas.
6. Written approval by the A&M System will be required for any news releases or the use of the A&M System’s name as a reference regarding a contract awarded to a Proposer.
7. Questions about the A&M System and this RFP should be submitted by email or fax and directed to:
Mr. Don Barwick
Email: Dbarwick@tamu.edu
FAX: (979) 845-6250
8. Responses to inquires which directly affect an interpretation or change to this RFP will be issued in writing by amendment and emailed by March 4, 2011 to all parties recorded by the A&M System as having received a copy of the RFP. All such amendments issued prior to the time that proposals are received shall be considered part of the RFP, and the Proposer shall be required to consider such in his proposal. Firms receiving this proposal other than directly from the web site provided by the Office of HUB and Procurement Programs are responsible for notifying Mr. Don Barwick at dbarwick@tamu.edu that they are in receipt of a proposal package and are to provide the name of the proposing organization, contact name, address, email address, and facsimile number in the event an amendment is issued.
Only those inquires to which replies are made by formal written amendment shall be binding. Oral and other interpretations or clarification will be without legal effect.
9. No reimbursement will be made by the A&M System for any expenses incurred in the preparation or presentation of proposals.
10. Except for an interest in the retirement funds, officers and employees of the A&M System may not have a direct interest in the gains or profits of any contract pursuant to this RFP, and may not receive pay or emolument for any service performed for the contractor(s).
11. Any planned or proposed use of subcontractors must be clearly documented in the proposal as discussed in Section 3.6 i. The Proposer shall be and remain solely responsible for all contract services. All agreements between the Proposer and its subcontractors shall include a provision agreeing to hold harmless and indemnify the A&M System.
12. The execution of a contract pursuant to this RFP is dependent upon the negotiation of a contract with the selected Proposer and approval by the appropriate officials in accordance with the policies and regulations of the A&M System.
13. The A&M System reserves the right to reject all offers and re-solicit or cancel this bid if it is deemed to be in the best interest of the A&M System.
14. The A&M System reserves the right to alter the specifications of its benefit programs and subsequently negotiate with the selected Proposer as needed to comply with any required changes.
15. The A&M System is not required to select the lowest priced proposal, but will take into consideration other factors such as ability to service contracts, past experience, financial stability, flexibility, and other relevant criteria.
16. In the event the selected organization fails to perform any of its duties or obligations as provided by the contract which will include the RFP and the Proposer’s response to the RFP, the A&M System without limiting any other rights or remedies it may have by law, equity or under contract, shall have the right to terminate the contract immediately. The selected organization understands and acknowledges that, notwithstanding any termination of the contract, certain obligations shall survive the termination of the contract.
In the event of a change in condition which may affect the group LTD plan administrative services for which proposals are solicited, the A&M System will expect a good-faith effort from any Proposer selected to absorb additional liabilities during the term of the contract without requiring rate increases until the next following renewal date. Such changes in condition include, but are not limited to, the following:
• Rules of the Texas Department of Insurance.
• Opinions of the Attorney General of the State of Texas.
• Federal and State statutes, court decisions and regulations from agencies and departments that may affect employment and benefit programs.
17. Information provided to the Proposer, including lists of covered employees or other employee data may not be used to solicit any other insurance coverage, annuity product, or any other product, unless specifically approved in advance by the A&M System.
18. The A&M System is exempt from the payment of premium taxes under Chapter 1601, Texas Insurance Code. No provision for the payment of premium taxes will be included in the calculation of premium rates.
19. Selected Proposers will be required to be ready to pay claims on an incurred basis effective September 1, 2011.
20. Your proposal may be rejected if:
• it is not received by 4:00p.m., (CST), on March 15, 2011,
• it is not completed in accordance with RFP instructions,
• it contains significantly inaccurate information, or
• the A&M System believes that rejection of the application is in the best interest of the State and its employees and retirees.
21. The A&M System will not designate an Agent of Record or any other such commissioned representative. All requests for the A&M System to provide such a designation will be rejected. The A&M System will communicate and negotiate only with principals of the applicant organization. The A&M System will not pay commissions in the event that the applicant organization chooses to name an agent of record and such an agent will not be recognized by the A&M System. In addition, no commission, broker or finders fees may be paid by the A&M System. You must certify in Section h that you will abide by these stipulations.
3.8 Contract Documents
In addition to the application, group policy, group policy riders, and group certificate, the A&M System will require an Administrative Agreement – To document items not addressed in the group policy, riders and certificate. A sample copy of the Administrative Agreement is attached as Exhibit E. You are not required to complete this document as part of your response.
3.9 Eligibility
Newly-eligible A&M System employees have a 60-day initial enrollment eligibility period.
The A&M System will, in all cases, determine eligibility for coverage and effective dates of coverage in accordance with its rules and procedures. If these rules and procedures differ from those normally utilized by the proposing organization, it is understood that the A&M System’s determination will prevail.
The eligibility conditions listed below apply for all benefit plans offered by the A&M System. An employee and his/her dependents are eligible for benefits if he/she meets one of the following criteria:
a. eligible to participate in the Teacher Retirement System of Texas (TRS) or Optional Retirement Program (ORP), and the employee works at least 50% time for at least 4 ½ months or for a semester of more than 4 months
b. a graduate student employee who works at least 50% time for at least 4 ½ months or a semester of more than 4 months
3.10 Communications and Enrollment
The A&M System requires the carrier to distribute booklets and letters to employees and retirees within very specific standards. All costs associated with communications and enrollment must be included in the proposed premium.
The A&M System will conduct an annual enrollment period for its eligible employees during the entire month of July, for the plan year beginning the following September 1. System Benefit Administration will produce a booklet summarizing the benefit plans, and employees will make benefit selections using the A&M System’s enrollment process. Over 70% of annual enrollment benefit selections are done online by employees. During this enrollment period, the successful bidder may wish to send promotional material, approved in advance by System Benefit Administration, to employees via U.S. Mail. The approved in advance requirement includes general material as well as any solicitation material developed specifically for A&M System employees.
As new communication materials are developed during the plan year, a request to send these materials to the employees must be submitted in writing to Benefits Administration along with copies of the proposed materials.
Although the A&M System distributes most communication information electronically, the carrier will be responsible for the cost of producing a small number of summary plan description booklets and/or SMM letters to be available for the various System Member Human Resource offices. The A&M System will work with the carrier to write or revise the SPD or SMM and determine the number of booklets or letters that will need to be produced.
The A&M System will make personnel available during normal business hours to respond to inquiries regarding the status or eligibility of a participant.
SECTION 4 – FUNDING
1. Current Funding
The LTD plan is fully insured and funded almost exclusively by employee payroll deductions. If the employee waives medical coverage and certifies that he/she has alternate medical coverage, a portion of the employer contribution may be used to pay for dental coverage.
The A&M System’s plan year corresponds to the fiscal year which begins on September 1, and ends on August 31.
2. Reserve Arrangements
The A&M System requires detailed information regarding the proposing organization’s methodology for calculating IBNR reserves and active/disabled life reserves. Reserve calculation formulas are subject to negotiation with the A&M System prior to signing a contract.
SECTION 5 – GENERAL ADMINISTRATION
5.1 Required Services
Notwithstanding other sections of this RFP which describe administrative interactions between the A&M System and its group insurance carriers, proposing organizations are advised of the administrative requirements listed in this section of the RFP. Proposing organizations will become responsible for these items and services to the A&M System upon the award of any contract. Any cost associated with these items and services must be included in your proposal.
1. Benefit contracts, affirmed by the A&M System as to form and content and approved by the State Board of Insurance in accordance with state and federal statutes, and technical and legal assistance in the administration thereof.
2. Management agreements, in addition to any benefit contracts, which formalize the A&M System’s relationship with any carrier.
3. Communication materials necessary for the proper administration of the plans (including but not limited to SPDs, SMMs and claim forms) subject to editing of format, content and final approval by the A&M System.
4. Claim management and processing.
5. Quarterly and annual management reports, including but not limited to, claims, utilization, and case management information as agreed to by the A&M System and the Proposer.
6. Ad hoc claim/utilization reports or analyses as requested by the A&M System and which do not represent extraordinary data processing effort by the claim administrator.
8. Actuarial analysis and reports demonstrating the appropriate premium rates and reserve levels.
9. If evidence of insurability is required, professional underwriting services for the evaluation of late applications which may be subject to approval based on medical history.
10. Annual accounting of all financial transactions involving the A&M System including, but not limited to all premiums, claims, reserve changes, interest earnings and retention.
SECTION 6 – GROUP LONG TERM DISABILITY INSURANCE
6.1 Plan Background
The A&M System offers a voluntary, contributory Long Term Disability plan with benefits designed to be a source of income if the employee is unable to work for an extended period of time due to disability. Benefits are provided after a 90-day qualifying period of disability. LTD coverage is offered to all benefits-eligible employees, but is not offered to retirees or dependents. Evidence of health restrictions have been removed such that employees can enroll during each annual enrollment period, and are subject to pre-existing condition limitations.
6.2 Current Enrollment
The A&M System has a total of approximately 27,000 LTD benefit-eligible employees. Of that 27,000 just over 14,500 are located in the Bryan/College Station area. Current enrollment in the LTD plan is approximately 12,426. A report summarizing current LTD enrollment is available in Exhibit G.
Along with the RFP instructions, there was an additional supplemental file that you should have downloaded. The file named All Benefit Eligible Employees & Retirees Demographics provides demographic information for all those who are benefit eligible. Exhibit C provides further information about the data found on the files.
6.3 Plan Design
Employees are not required to provide Evidence of Insurability to enroll as a new-hire, during annual enrollment or within 60 days of a Change in Status.
If an employee becomes disabled, the LTD plan pays 65% of the employee’s base pay minus other disability benefits the employee is eligible to receive. Other sources of disability benefits include, but are not limited to other group disability plans, workers’ compensation, unemployment compensation, Social Security payments, and other government plans. Monthly LTD benefits are also reduced by any sick leave or vacation pay received. The LTD benefit is not reduced by benefits from the Teacher Retirement System, the Optional Retirement Plan, or a former employer’s retirement plan unless the employee receives payments while receiving LTD benefits.
The maximum monthly benefit is $8,000. The minimum monthly benefit is $100 or 10% of the employee’s monthly benefit before deductions for other income benefits, whichever is greater. Benefits become payable after 90 days of disability. Partial disability benefits are also available.
Employees continue to receive disability benefits after 60 months if they cannot do any job for which they are or could become qualified by training, education or experience.
Monthly payments (except for non-organic mental impairments) continue until the employee’s disability ends, the employee dies, or until the greater of the reducing benefit duration or social security normal retirement age, whichever occurs first. See Exhibit F under September 1, 2010, plan design changes for more specific information.
If an employee is unable to perform all of the duties of his/her job because of non-organic mental impairments, benefits will be received for a maximum of 24 months.
The LTD plan SPD can be found at .
A report of LTD insurance plan experience is provided in Exhibit G.
BASE YOUR QUOTE ON THE SAME BENEFIT DESIGN THAT IS CURRENTLY IN PLACE.
6.4 Coverage Costs
The premium amounts are based on the employee’s annual salary and whether the employee uses tobacco products or not. A mid-year pay increase would increase a participant’s monthly benefit, should the participant becomes disabled. However, the participant would not be required to pay additional premiums for the increased amount until the following September 1. Coverage costs are completely paid by the employee, unless the employee waives A&M System Health coverage, in which case he/she may choose to apply a portion of the state contribution towards the LTD premium.
The current monthly rate per $100 of monthly salary is: $0.28 Non-Tobacco User
$0.30 Tobacco User
6.5 Continuity of Coverage
Insured persons shall not lose coverage solely by reason of change in insurers. For example, persons who are not actively at work on the effective date will be assured continuity of coverage if their insurance would otherwise have been continuous except for the change in insurers.
SECTION 7 – EVALUATION OF PROPOSALS
7.1 Evaluation Information
The A&M System will utilize an evaluation team to evaluate the responses to this RFP. The information provided in the RFP response and information provided during the finalist presentations will be considered during the evaluation process. The A&M System is not required to select the lowest priced proposal, but will take into consideration other factors such as ability to service contracts, past experience, financial stability, flexibility, and other relevant criteria.
All proposals must be complete and convey all the information requested to be considered responsive. If the proposal fails to conform to the essential requirements of the RFP, the A&M System alone will determine whether the variance is significant enough to consider the proposal susceptible to being made acceptable and therefore a candidate for further consideration, or not susceptible to being made acceptable and therefore not considered for award.
The A&M System reserves the right to reject any and all proposals. Proposal responses from prospective vendors that do not demonstrate adequate financial stability may be rejected at the evaluation stage.
7.2 Evaluation Criteria and Weights
The evaluation shall be based on, but not limited to the criteria listed below. The following point system will be used.
Organizational Characteristics……………………………………………..35
Stability, experience, references, account management, flexibility
Administrative Capability..............................................................................35
Eligibility and claims payment systems, customer service, reporting
capability, employee/consumer tools, website
Cost……………………………………………………………………………30
TOTAL POINTS…………………………………………………………….100
EXHIBIT A – EXECUTION OF OFFER
RFP 01 RSK-11-006
DATE: March 15, 2011
In compliance with this RFP, and subject to all the conditions herein, the undersigned offers and agrees to furnish any or all commodities or services at the prices quoted.
1. Proposer Affirmation
Signing this proposal with a false statement is a material breach of contract and shall void the submitted proposal or any resulting contracts, and the proposer may be removed from all proposal lists. By signature hereon affixed, the proposer hereby certifies that:
A. The proposer has not given, offered to give, nor intends to give at any time hereafter any economic opportunity, future employment, gift, loan, gratuity, special discount, trip, favor, or service to a public servant in connection with the submitted proposal.
B. The proposer is not currently delinquent in the payment of any franchise tax owed the State of Texas.
C. Pursuant to Section 2155.004 Government Code, relating to collection of state and local sales and use taxes, the proposer certifies that the individual or business entity named in this proposal is not ineligible to receive the specified contract and acknowledges that this contract may be terminated and/or payment withheld if this certification is inaccurate.
D. Neither the proposer nor the firm, corporation, partnership or institution represented by the proposer, or anyone acting for such firm, corporation or institution has violated the antitrust laws of this State, codified in Section 15.01, et seq., Texas Business and Commerce Code, or the Federal Antitrust Laws, nor communicated directly or indirectly the proposal made to any competitor or any other person engaged in such line of business.
E. The proposer has not received compensation for participation in the preparation of the specifications for this Invitation for Proposal.
F. The proposer shall defend, indemnify, and hold harmless the State of Texas, all of its officers, agents and employees from and against all claims, actions, suits, demands, proceedings costs, damages, and liabilities, from any acts or omissions of proposer or any agent, employee, subcontractor, or proposer of proposer in the execution or performance of this purchase order.
G. Proposer agrees that any payments due under this contract will be applied towards any debt, including but not limited to delinquent taxes and child support that is owed to the State of Texas.
H. Proposer certifies that they are in compliance with section 669.003 of the Government Code, relating to contracting with executive head of a State agency. If section 669.003 applies, proposer will complete the following information in order for the proposal to be evaluated:
Name of Former Executive:
Name of State Agency:
Date of Separation from State Agency:
Position with Proposer:
Date of Employment with Proposer:
I. Proposer agrees to comply with Government Code 2155.4441, pertaining to service contract use of products produced in the State of Texas.
2. Texas Family Code Section 231.006
Ineligibility to Receive State Grants or Loans, or Receive Proposals or Payments on State Contracts.
A. A child support obligor who is more than 30 days delinquent in paying child support and a business entity in which the obligor is a sole proprietor, partner, shareholder, or owner with an ownership interest of at least 25 percent is not eligible to:
1. receive payments from state funds under a contract to provide property, materials, or services: or
2. receive a state-funded grant or loan.
B. A child support obligor or business entity ineligible to receive payments under Subsection (a) remains ineligible until:
1. all arrearages have been paid; or
2. the obligor is in compliance with a written repayment agreement or court order as to any existing delinquency.
C. Pursuant to Section 231.006 (c), Family Code, proposal should include name and Social Security number of each person with at least 25% ownership of the business entity submitting the proposal. Proposers that have pre-registered this information on the TPASS Centralized Master Proposers List have satisfied this requirement. If not pre-registered, attach name & social security number for each person. Otherwise this information must be provided prior to contract award.
D. “Pursuant to Section 231.006, Family Code, re: child support, the proposer certifies that the individual or business entity named in this proposal is not ineligible to receive the specified payment and acknowledges that this contract may be terminated and payment may be withheld if this certification is inaccurate.”
E. If a state agency determines that an individual or business entity holding a state contract is ineligible to receive payment under Section (a) the contract may be terminated.
F. If the certificate required under Subsection (d) is shown to be false, the vendor is liable to the state for attorney’s fees, the costs necessary to complete the contract, including the cost of advertising and awarding a second contract, and any other damages provided by law or contract.
Added by Acts 1995, 74th Leg., ch. 20, Sec. 1, eff. April 20, 1995. Amended by Acts 1995, 74th Leg., ch. 751, Sec. 82, eff. Sept. 1, 1995.
3. Signature
Submittal should give Payee Identification Number (PIN) (Formerly Vendor ID), full firm name and address of Vendor (enter in block provided if not shown). Failure to manually sign submittal will disqualify it. The person signing the submittal should show title or authority to bind his/her firm in contract. The Payee Identification Number is the taxpayer number assigned and used by the Comptroller of Public Accounts of Texas. Enter this number in the spaces provided on the Execution of Offer.
Payee Identification Number (PIN): _________________________________________________
Sole Owner should also enter Social Security Number: __________________________________
Vendor/Company: ______________________________________________________________
Signature (INK): ______________________________________________________________
Name: _______________________________________________________________________
Title: ________________________________________________________________________
Street: _______________________________________________________________________
City/State/Zip: _________________________________________________________________
Telephone No.: ________________________________________________________________
Fax No.: _____________________________________________________________________
E-mail: ______________________________________________________________________
Check below if preference claimed under Rule 1 T.A.C. 113.8
(___) Supplies, materials or equipment produced in Texas/offered by Texas proposer* (___) Energy efficient products
(___) Agriculture products produced or grown in Texas (___) Rubberized asphalt paving material
(___) Agriculture products and services offered by Texas proposer (___) Recycled motor oil and lubricants
(___) U.S.A. produced supplies, materials or equipment (___) Energy efficient products
(___) Products of persons with mental or physical disabilities (___) Products produced at facilities located on
(___) Products made of recycled, remanufactured, or environmentally sensitive formerly contaminated property
materials (___) Products and services from economically depressed or blighted areas
* By signing this offer, respondent certifies that if a Texas address is shown as the address of the respondent, respondent qualifies as a Texas Resident Proposer as defined in Rule 1 TAC 113.8.
THIS SHEET MUST BE COMPLETED, SIGNED, AND RETURNED WITH RESPONDENT’S PROPOSAL. FAILURE TO SIGN AND RETURN THIS SHEET WILL RESULT IN THE REJECTION OF YOUR SUBMISSION.
EXHIBIT B – COMPANY PROFILE
a. Legal Name:
DBA Name:
Number of Years in Business:
Type of Operation: Individual Partnership Corporation Government
Number of Employees:
Annual Revenues:
Annual
b. Provide a general overview of the company, including where the company is headquartered, if it has a major base of operation in Texas, and if it has operated under other names.
c. Include a narrative history of the firm and its background in providing employee group benefits. Explain the added value or service that your organization provides that distinguishes it from all others.
d. Please provide a copy of your company’s current certificate of authority with the Texas Department of Insurance.
e. Have you ever been sanctioned by the Texas Department of Insurance? If so, please indicate the action taken and the current status.
f. Provide a copy of your company’s audited financial statements for the past two (2) years.
g. Please indicate the date of your company’s last annual audit by your domicile’s Department of Insurance. Were there any adverse findings and, if so, what is the resolution of those findings?
h. Provide a financial rating of your company and any documentation (such as a Dunn and Bradstreet Analysis) which indicates the financial stability of your company.
i. Provide a copy of your company’s most recent SAS 70, Type II report.
j. Describe your company’s disaster recovery and contingency plans. Have you ever tested or actually implemented these plans?
k. Is your company currently for sale or involved in any transaction to expand or to become acquired by another business entity? If yes, please explain the impact both in organizational and directional terms.
l. Provide any details of all past or pending litigation or claims filed against your company that would negatively impact your company’s performance under an agreement with the A&M System.
m. Is your company currently in default on any loan agreement or financing agreement with any bank, financial institution, or other entity. If yes, specify date(s), details, circumstances, and prospects for resolution.
EXHIBIT C - Supplemental Files to RFP Instructions
You should have downloaded the following demographic file along with the RFP instructions. If you failed to download this file, you can do so by returning to:
Demographic Information:
The Excel file below provides demographic information based on the employee’s zip code and age.
|Field |Valid Values |
|Zip Code |Participant’s Zip Code |
|Age |Participant’s Age |
|Employee Status |A – Active, C – COBRA (employees), L – Leave of Absence, |
|Male Participants |Numerical Count |
|Female Participants |Numerical Count |
1) All Benefit Eligible Employees & Retirees Demographics: This file contains demographic information for ALL benefit eligible employees, regardless of enrollment. In order to arrive at the appropriate number of participants, you will need to sum the “Male Participants” and “Female Participants” columns and add them together. You CANNOT just count the number of lines in the file since many lines include multiple individuals.
Plan Design Information:
1) Long-Term Disability SPD -
Summary Plan Description for the Long-Term Disability plan.
EXHIBIT D - QUESTIONNAIRE
General Instructions
1. When responding, please restate the question and provide your answer immediately thereafter.
2. Rates and fees must be guaranteed for three years.
3. Please base quantitative responses on the 12 months ending August 31, 2010, or the most recent 12-month period available, unless otherwise specified.
4. The A&M System operates on a fiscal year beginning September 1 and ending August 31.
Background Information
5. Where will the account representative be located? Will this individual have responsibility for other clients? If yes, how many?
6. Would your employees use a secure e-mail system to communicate with us and, if so, what system do you use?
7. Describe in detail your LTD vocational rehabilitation program. Does it include therapy, counseling, vocational evaluation, and job preparation? What would be the A&M System’s involvement in this process? Include the following in your description:
• Outside vendors used
• Cost savings achieved from program
• Sample claim situations with vocational rehabilitation
8. Do you have internal rehabilitation coordinators? What is their training and experience?
Administration
9. Please provide the location of the office where the following functions are performed and note how long the office has been in operation.
a. Account Manager/Account Representative
b. Claims processing
c. Vocational rehabilitation
10. During the month of July, the A&M System holds approximately 25 enrollment meetings throughout the state of Texas. These meetings are voluntary for employees and retirees, however should you be awarded this contract, a representative from your organization will be required to be in attendance at a number of the meetings. Please indicate your willingness to meet this requirement.
11. Please indicate your willingness to print and a small supply of SPDs .
12. Please confirm that you will handle annual W-2 accounting directly with plan participants, with informational copies for our records.
13. Do you withhold federal income taxes and Social Security taxes from LTD payments if the plan is insured? Is the expense of withholding included in your quotations for the arrangements where taxes are withheld?
14. Describe the method used to calculate each of the following reserves:
• Incurred But Not Reported (IBNR)
• Pending Claims
• Disabled Lives
• Other (describe)
15. What actuarial tables and interest rate assumptions are used to determine disabled lives reserves? Do you adjust table valuations to reflect diagnoses?
16. How would retention be calculated for LTD? Do you have a mechanism whereby retentions can be guaranteed? If so, please describe.
Claims Processing
17. In the office that would process A&M System claims, please provide:
a. the number of clients for which you process claims
b. the number of covered employees for whom you process claims
c. the number of claims processors
18. What additional responsibilities do claim processors have (e.g., telephone inquiries, correspondence, filing, opening mail, etc.)?
19. Please provide the URL (address) for your web site. Please describe claim-status-viewing capabilities for the individual participant as well as the A&M System’s Benefits Administration and/or other divisional HR staff. How long is an individual claimant’s payment history maintained online?
20. Describe your review and investigative procedures for new and ongoing LTD claims. What type of investigative process is utilized in the event of unusual or suspicious claims?
21. What are your organization’s nationwide goals for LTD insurance claims turnaround? What was the average length of time for processing new LTD claims in the past twelve months in the office that will process A&M System claims?
Business Days Percentage
0 – 5 ________
6 – 10 ________
11 – 15 ________
16 – 20 ________
22. Describe in detail your approach in assisting claimants in receiving Social Security benefits.
23. How long are LTD records maintained?
24. How is the confidentiality of LTD records maintained?
Performance Guarantees
25. Are you willing to put some amount of fees at risk and how much for:
• Claim processing accuracy,
• Claim financial accuracy,
• Claim payment turnaround time,
• Member service response time and accuracy,
• Customer service standards,
• Other
What methodology and standards would you propose for calculating and reporting this information?
Management Reporting
26. Please describe your data analysis and reporting capabilities. Do you have customized reporting capabilities? Is there an additional cost involved with customized reporting?
27. Please provide a list and brief explanation of your standard reports including frequency of production and availability following the close of the reporting period. Are reports available electronically? (The A&M System expects the standard report package to be provided at no additional cost.)
28. What additional ad hoc reports are available and at what cost?
Internal Audit, Quality Control and Utilization Review
29. Describe your organization’s internal audit and quality control procedures. Describe any special programs designed to monitor and control LTD plan utilization.
30. Does your organization conduct member and/or provider satisfaction surveys? Please provide a copy of the survey questionnaire and the results of the most recent surveys.
Claims Administration
31. The employee notifies the local Human Resource Office of a disability and is given an LTD packet. The employee may either return the completed LTD packet to the local Human Resource Office or send it directly to the carrier via fax, mail or electronically through the web. The HR office notifies the carrier electronically that a claim has been/will be filed for a particular participant. The HR office may file the entire claim including the employer statement and the proof of enrollment, via mail or electronically. Interim correspondence with the claimant is handled by the carrier. The carrier notifies the employee, the Human Resource Office, and System Benefits Administration when a claim is approved or denied, the latter two being notified electronically. The carrier also notifies the local Human Resources Office and System Benefits Administration, electronically when benefits are terminated.
Benefits are paid directly to the claimant, and the carrier should provide the option of direct deposit of benefits into the claimant’s bank account.
Premiums
32. Non-Tobacco User: $__________ monthly rate per $100 of monthly salary
Tobacco User: $__________ monthly rate per $100 of monthly salary
(The difference between non-tobacco and tobacco user premiums represents an incentive difference rather than an actuarial difference.)
Plan Provisions
33. Complete the chart below for the LTD plan.
|Provision |TAMUS Current |Carrier Standard Benefit |Comments / issues with administering current |
| |Benefit | |plan design |
|Definition of Disability |See LTD SPD | | |
|Elimination Period |90 days | | |
|Pre-Disability Earnings |See LTD SPD | | |
|Temporary Recovery during Elimination|Max 15 days | | |
|Period | | | |
|Pre-existing Limitations |3/12 – three months before | | |
| |insurance takes effect until | | |
| |actively at work and covered | | |
| |for 12 mos. | | |
|Definition of any occ. |See LTD SPD | | |
|Exclusions |See LTD SPD | | |
|Late Applicants - EOI |Not required | | |
|Mental/Nervous Health Limitation |24-month benefit limitation | | |
| |unless disability results | | |
| |from organic condition | | |
|Minimum & Maximum Monthly Benefit |Min. – the lesser of 10% of | | |
| |monthly benefit or $100 | | |
| |Max. – the lesser of 65% of | | |
| |salary or $8,000 | | |
|Work Incentive |After 12 months of benefits, | | |
| |monthly benefit reduced by | | |
| |50% of amount earned by | | |
| |working | | |
|Maximum Benefit Duration |See page 18 of this RFP | | |
|C.O.L.A |3% after 12 monthly benefit | | |
| |payments, up to 5 adjustments| | |
|Offsets |See LTD SPD | | |
|Family Care Rehab Benefits |See LTD SPD | | |
For easy reference, the LTD SPD can be found at:
Samples
34. Please provide samples of the following after EXHIBIT E behind the tab entitled Samples LTD:
a. Claim kit or form
b. Standard communications produced in the processing of claims (such as Explanation of Benefits, Request for Additional Information Denial Letter, etc.)
c. Standard (no additional cost) management reports
d. Optional (additional cost) management reports
e. Ongoing client communications
f. Other standard (no additional cost) communication materials directed to participants, including an SPD
g. Optional (additional cost) communication material directed to participants
h. Insured contract
EXHIBIT E –ADMINISTRATIVE AGREEMENT
Between
_________________________
(hereinafter called “_______________”)
and
THE TEXAS A&M UNIVERSITY SYSTEM
(hereinafter called “A&M System”)
Regarding
Services in Connection with Group Long Term Disability Insurance Plan
Effective Date: September 1, 2011
WHEREAS, the A&M System has solicited proposals to provide Group Long Term Disability Insurance coverage (the “Plan”) for its employees (“Plan participants”); and
WHEREAS, _______________, proposes to issue Group Policy Number _________ (the “Policy”) to the A&M System to provide Plan coverage as may be included in the Policy; and
WHEREAS, the terms and conditions under which _____________ and the A&M System agree the Policy will be administered are not entirely documented in the Policy or certificates issued thereunder, and are documented in this separate administrative agreement (“Agreement”).
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, ____________ and the A&M System agree as follows:
Services to be provided by ____________
In conjunction with the coverage provided under the Policy, __________________ agrees to provide the following services:
A. Annual accounting of all financial transactions involving the A&M System including, but not necessarily limited to all premiums, claims, reserve changes, as applicable.
B. Participation in the enrollment process, as described in detail in Article 3 - Enrollment and Communications.
C. Communication materials necessary to the proper administration of the Policy, subject to editing of format, content and final approval by the A&M System, as described in detail in Article 3 - Enrollment and Communications below.
D. Claim processing in accordance with the terms and conditions of the Policy. __________________ will work directly with participants when processing claims and will notify the System Benefits Administration (“SBA”) if extraordinary problems or situations arise regarding any claims.
E. Provision of a first draft, in the format agreed to by the parties of the group policies, riders, group certificates, administrative agreement and any other legal documentation required by the Plan (“Plan Documents”).
F. Quarterly and annual management reports, including but not limited to, claims and utilization information as agreed to by the A&M System and __________________.
G. Such other services as the parties mutually agree upon in writing.
Services to be provided by the A&M System
The A&M System shall provide the following services in conjunction with the Policy and the administrative services provided by __________________:
A. Maintenance of an internet-based employee insurance enrollment system whereby employees may enroll in the group Plan electronically.
B. Maintenance of all eligibility information, on paper, electronically or in imaged form. If an employee terminates employment, the A&M System shall maintain this information for at least three Policy years beyond the year in which the employee terminates employment.
C. Transmission of electronic data and electronically stored imaged documents using encryption or other mutually acceptable safeguards and security.
D. Determination of eligibility for coverage and effective dates of coverage in accordance with the terms of the Policy and the A&M System’s rules and procedures.
E. Provision of personnel during normal business hours to respond to inquiries regarding the status or eligibility of a participant.
F. Timely payment of premium before the end of the grace period as described in the policy.
G. Such other services as the parties mutually agree upon in writing.
Enrollment and Communications
A. During the annual enrollment period, which is during the entire month of July, __________________ may send promotional material, approved in advance by the A&M System, to the A&M System employees via U.S. Mail. In addition, the A&M System holds approximately 25 enrollment meetings across the state during the month of July. __________________ will attend a number of these meetings as agreed upon mutually by the parties, especially during the first year of implementation. If any new communication materials are developed during the Policy year, __________________ must submit a request in writing to SBA to send these materials to the employees, along with copies of the proposed materials.
B. __________________ agrees to pay for the cost of printing Summary Plan Description (“SPD”) documents.
Article 4 - Performance Guarantees
Average response time of 30 seconds
Call abandonment rate of less than 5 percent
Claim payment accuracy rate of 99%
Article 5 - Fees
A. The services provided by __________________ pursuant to this Agreement are included in the premium rates for coverage pursuant to the Policy.
B. Premium rates for the Policy are guaranteed for a three-year period, beginning with a September 1, 2011 effective date and continuing through August 31, 2014.
C. __________________ certifies that no commissions, broker or finders fees are included in the premium rates.
D. The A&M System shall pay additional fees to __________________ for additional services as the parties mutually agree upon.
Article 6 - Miscellaneous Reservation of Rights
A. The A&M System reserves the right to alter the specifications of its benefit programs and subsequently negotiate with __________________ as needed to comply with any required changes.
B. The A&M System must specifically approve in advance any use by __________________ of member-identifying information provided to __________________, including lists of covered employees or other employee data, to solicit any other insurance coverage, or any other product.
C. Both parties reserve the right to approve in writing any news release or use of the other’s name as a reference regarding the Policy and this Agreement.
Article 8 - Dispute Resolution
Unless an applicable state statute or applicable federal law establishes another procedure for the resolution of disputes, the dispute resolution process provided for in Chapter 2260 of the Government Code shall be used, as further described herein, by the A&M System and __________________ to resolve any claim for breach of contract made by __________________.
__________________’s claim for breach of this contract that the parties cannot resolve in the ordinary course of business shall be submitted to the negotiation process provided in Chapter 2260, subchapter B, of the Government Code. To initiate the process, __________________ shall submit written notice, as required by subchapter B, to Ms. B.J. Crain, Chief Business Officer. Said notice shall specifically state that the provisions of Chapter 2260, subchapter B, are being invoked. A copy of the notice shall also be given to all other representatives of the A&M System and the __________________ otherwise entitled to notice under the parties’ contract. Compliance by __________________ with subchapter B is a condition precedent to the filing of a contested case proceeding under Chapter 2260, subchapter C, of the Government Code.
The contested case process provided in Chapter 2260, subchapter C, of the Government Code is __________________’s sole and exclusive process for seeking a remedy for any and all alleged breaches of contract by the A&M System if the parties are unable to resolve their disputes.
Compliance with the contested case process provided in subchapter C is a condition precedent to seeking consent to sue from the Legislature under Chapter 107 of the Civil Practices and Remedies Code. Neither the execution of this contract by the A&M System nor any other conduct of any representative of the A&M System relating to the contract shall be considered a waiver of sovereign immunity to suit.
The submission, processing and resolution of __________________’s claim are governed by the published rules adopted by the Office of the Attorney General, pursuant to Chapter 2260, as currently effective, hereafter enacted or subsequently amended. These rules are found at The Texas Register, Volume 25, Number 21, issued May 26, 2000.
Neither the occurrence of an event nor the pendency of a claim constitutes grounds for the suspension of performance by __________________, in whole or in part.
GThe designated individual responsible on behalf of the A&M System for examining any claim or counterclaim and conducting any negotiations related thereto as required under 2260.052 of House Bill 826 of the 76th Legislature shall be Ms. B.J Crain, Chief Business Officer.
Article 9 - General Release and Indemnification
A. __________________ agrees to release, hold harmless, and unconditionally indemnify the A&M System, each and all of its System Members, its officers and employees, and the State of Texas from:
1. Any liability arising from unpaid claims under the Policy including any and all services furnished by __________________;
2. Any liability which might result from discriminatory organizational practices by __________________; and
3. Any liability which arises from the negligent acts or omissions of any officer, employee, agent, or representative of __________________ or individual or organization under contract to __________________ for specific services related to the administration of the A&M System’s benefit plans.
B. __________________ acknowledges that, as an agency of the State of Texas, the A&M System is prohibited by the state constitution from executing contractual indemnity agreements. (See Tex. Atty. Gen. Op. MW-475, 1982)
Article 10 - Term and Termination
A. The Effective Date of this Agreement is September 1, 2011.
B. All fees and arrangements are guaranteed for a period of three Policy years from the Effective Date of this Agreement.
C. Subject to satisfactory performance and mutually agreeable renegotiation of rate and fees after the three year guaranteed rate period, the A&M System may renew this Agreement for up to an additional three years commencing September 1, 2014, and ending no later than August 31, 2017, by notifying __________________ in writing of its intent to renew this Agreement at least 180 days prior to the end of three year guaranteed rate period.
Article 11 - General Provisions
A. Assignment. No part of this Agreement, or any rights, duties, or obligations described herein will be assigned or delegated without the prior written consent of both parties, except that __________________ may assign or delegate this Agreement to an affiliate or subsidiary company upon prior notice to the A&M System of such assignment. __________________’s standing contractual arrangements for the acquisition and use of facilities, services, supplies, equipment and personnel from other parties will not constitute an assignment under this Agreement.
B. Captions. Captions appearing in this Agreement and its exhibits are provided for convenience only and in no way define, limit, construe or describe the scope of articles, sections or paragraphs for which they are used.
C. Disclaimer. It is mutually understood that the effective performance by __________________ of services under this Agreement will require that the A&M System furnish to __________________ timely information, including identification or certification of Participants eligible for benefits, date of such eligibility, number of participants covered under the Plan and such other information as may be necessary for processing of claims. It is mutually agreed that __________________ will not be responsible for delay in the performance of this Agreement or for nonperformance of this Agreement, which is substantially caused in part by the failure of the A&M System to furnish any required information within a reasonable time.
D. Entirety. This Agreement and the Policy and any exhibits or amendments, respectively, will constitute the entire Agreement between the parties and will supersede any and all prior agreements or understandings, either oral or in writing, between the parties respecting the subject matter herein. In the event of any conflict between this Agreement and the Policy, the Policy shall govern with respect to the benefits provided thereunder.
E. Force Majure. Neither party will be liable for any failure to perform its obligations under this Agreement if prevented from doing so by a cause or causes beyond its reasonable control, including but not limited to, acts of God or nature, fires, floods, storms, earthquakes, riots, strikes, wars or restraints of government.
F. Governing Law. This Agreement will be governed by, and will be construed in accordance with, the laws of the State of Texas without regard to conflict of laws principles.
G. Independent Contractor. __________________ will provide services under this Agreement as an independent contractor. __________________ employees will not, for any reason, be considered employees of the A&M System or of the State of Texas.
H. Legal Construction. Should any provision(s) contained in this Agreement be held to be invalid, illegal or otherwise unenforceable, the remaining provisions of the Agreement will be construed in their entirety as if separate and apart from the invalid, illegal or unenforceable provision(s) unless such construction were to materially change the terms and conditions of the Agreement.
I. Waiver. Failure of either party to enforce any obligation under this Agreement shall not waive that party’s right to enforce such obligation in the future.
J. Litigation. Each party will immediately advise the other in writing of any information concerning litigation or threatened litigation, which comes to its attention with regard to this Agreement and/or the Policy.
K. Notice. Any notices pertaining to this Agreement shall be given in writing and shall be deemed duly given when personally delivered to the authorized representatives of the other party as listed below or sent by certified mail, return receipt requested, postage prepaid. A notice sent by certified mail shall be deemed given on the date of receipt or refusal of receipt. All notices shall be addressed to the appropriate party as follows:
To:
Company Name__________________
Address ________________________
____________________________
Attn: _______________________
With a copy to:
_____________________
_____________________
_____________________
Attn: _________________
To:
Paul Bozeman
The Texas A&M University System
200 Technology Way, Suite 1120
College Station, TX 77845-3424
EXECUTED to be effective as of the Effective Date.
For: For:
__________________, Inc. The Texas A&M University System
By: By:
Title: Title:
Date: Date:
EXHIBIT F – PLAN DESIGN HISTORY
Plan Inception
1) Elimination period – 90 days
2) Workers’ Compensation - offset
3) Pre-Existing 3/12
4) 90 days late submission
5) Recurrent claim provision after the Elimination Period – 6 months
6) Temporary recovery in the WP – 15 days
7) Limited Benefit Conditions:
Mental/Nervous
• 24 months from Date of Disability
• Per occurrence with confinement
• Schizophrenia, dementia, and organic brain disease excluded from limitation
8) 60 month own occupation
9) Own occupation 80%/ Any Occupation 65%
10) SS Estimation - yes
11) 3% COLA with 12 month waiting period; Maximum duration – 5 years
September 1, 2010
Premiums for this plan will be decreasing. There are also two plan design changes:
1. Definition change from “disabled from your occupation” to “disabled from your job”, which is more specific to the duties at your particular job.
2. Benefits will be provided until the greater of the reducing benefit duration or social security normal retirement age.
Reducing Benefit Duration SSN normal retirement age
Age @ time of Benefit duration Birthdate SSN normal retirement age
of disability
Less than 60 To age 65 1937 or earlier 65
60 60 months 1938 65 + 2 mos
61 48 months 1939 65 + 4 mos
62 42 months 1940 65 + 6 mos
63 36 months 1941 65 + 8 mos
64 30 months 1942 65 +10 mos
65 24 months 1943 - 1954 66
66 21 months 1955 66 + 2 mos
67 18 months 1956 66 + 4 mos
68 15 months 1957 66 + 6 mos
69+ 12 months 1958 66 + 8 mos
1959 66 + 10 mos 1960 and later 67
October 1, 2010
1) Clarified pre-existing condition as 3/12 versus 90/90/12.
EXHIBIT G - PLAN EXPERIENCE
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EXHIBIT H - PARTICIPATION
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