SOLICITATION: RFP SVC Flexible Spending Account and COBRA Administration AMENDMENT NO. 1. Due: On or before March 8, 2013 at 2:00 PM CST

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1 DATE: February 22, 2013 University Health System Business Center Spencer Lane San Antonio, TX SOLICITATION: RFP SVC Flexible Spending Account and COBRA Administration AMENDMENT NO. 1 Due: On or before March 8, 2013 at 2:00 PM CST NOTICE TO BIDDERS: A. Receipt of this Amendment shall be acknowledged on the Bid Form. B. Bidders are required to sign this amendment acknowledging receipt and return a copy by or fax to the UHS Purchasing Department. The Purchasing Department fax number is and corresponding for this purpose is Carol.Garza@uhssa.com. C. This Amendment Form is part of the RFP SVC documents for the above referenced project and shall be incorporated integrally therewith. D. Each bidder shall make necessary adjustments and submit their proposal with full knowledge of all modifications, clarifications, and supplemental data included therein. Company Name: Vendor Signature Date

2 RFP SVC Flexible Spending Account and COBRA Administration Amendment No. 1 Page 2 of 3 Item 1: Questions 1. Who is the current FSA and/or COBRA administrator? Answer: Commerce Benefits Group. 2. How long have they provided administration to UHS? Answer: Since Why is UHS bidding at this time? Answer: The current contract has expired. 4. Please provide the current fee structures for both FSA & COBRA as this will help us to determine if we can offer an arrangement to UHS. Answer: Medical Dependent Both Medical and Dependent Administration Fee FSA Fees $2.50 per Employee $2.00 per Employee $4.00 per Employee Cobra Fees $1,000 per Month plus a % of Premium 5. On page 16, Section III Company Response, A. Specifications Background Is University Health System bidding the FSA & COBRA services out because the contract is up and they are required to bid at the end of each contract or are they experiencing any service issues with the current administrator? Answer: We are not experiencing any service issues. Our contract expired and our practice is to go out for bid. 6. On page 17, Section III Company Response, A. Specifications Overview of the plans FSA Administration Can you disclose what the current FSA fees are? Answer: Please see chart above. 7. On page 17, Section III Company Response, A. Specifications Overview of the plans COBRA Administration- Can you disclose what the current Cobra fees are? Answer: Please see chart above. 8. On page 17, Section III Company Response, A. Specifications Overview of the plans COBRA Administration Can you tell us how many benefit enrolled employees there are? Answer: As of January 2013, there are approximately 43 COBRA participants in the medical plans, 40 in the dental plans, 21 in the vision plan, 0 in the FSA and 0 in the EAP.

3 RFP SVC Flexible Spending Account and COBRA Administration Amendment No. 1 Page 3 of 3 9. Is there a fee sheet that you would like for us to use for placing the FSA fees, as there was one included for the Cobra fees? Answer: No there is no set format, you may utilize the Cobra format or create an enhanced format. 10. What is the primary reason for FSA and Cobra administration going out for bid? Answer: University Health System conducts RFPs after a contract expires to ensure we offer our employees valuable insurance coverage at competitive rates. 11. Can you share the current FSA and Cobra fees that are in place with your current vendor? Answer: Please see chart above. 12. Can you share any details regarding improvements or enhancements that you might like to see added to the current FSA and/or COBRA administration? Answer: We are open to reviewing your ideas for improvements and enhancements. 13. What is the current banking arrangement for the FSA? Answer: Employees can either receive reimbursement through direct deposit or check. UHS pays FSA premiums through employee contributions. 14. Are the FSA and COBRA questionnaires available in Microsoft Word format? Answer: See Attachment 1. For a Word formatted copy, Carol Garza at Carol.Garza@uhs-sa.com. 15. One of our Cobra/FSA insurance carriers does not have an affirmative action plan in place. As an organization, they promote Equal Opportunity in all employment practices and file an EE0-1 Report each year. Since they do not meet this requirement; will UHS accept a copy of the EE0-1 annual report in lieu of the Affirmative Action Plan; or would this represent an automatic disqualification? Answer: UHS will accept a copy of your EEO-1 annual report. End of Amendment No. 1

4 Flexible Spending Account Questionnaire Please submit/respond to the below questions. (Items left blank or incomplete responses will cause the proposal to be rejected) Plan Design 1. University Health System has an annual minimum of $ for both the Healthcare and Dependent Care FSA. Please verify that your system can accommodate this request. 2. University Health System currently does not offer Debit Cards but is interested in obtaining information/quotes. Please indicate if your system can or cannot accommodate the use of Debit Cards. Please also specify fees associated with the cards. 3. Currently, reimbursement for claims is made via check or direct deposit. Please provide information on your reimbursement capability such as direct deposit capabilities and fees that are associated with direct deposit reimbursement, direct deposit into a card and if your system cannot accommodate direct deposit reimbursement, please indicate. Installation 4. The carrier may be required to attend enrollment meetings and/or informational sessions at various times and sites at our various locations. Will enrollment representatives be available to attend these sessions and will any fees apply? 5. Describe the manner in which the program would be communicated to employees. Provide samples of promotional materials. Also, can materials be customized to meet University Health System requirements? 6. Describe how your telephone and answering system will handle the expected call volume. 7. Describe the days of the week and hours of operation for the customer service center. Also, describe the staffing for member services. What are the staffing ratios? 8. What will you do to assist during implementation? Fees 9. Provide your fees associated with administering this plan. Fees should be stated on a per employee per month basis or as a flat monthly fee if applicable. Fees quoted should be guaranteed for either a three-year term with an option to renew for one additional year or a four-year term and should assume no minimum participation standards. Provide any assumptions or conditions with regard to your fees. 10. List all fees, in addition to those above, such as start up costs, broker fees, etc. and if these fees are monthly, annual or a one-time fee?

5 11. What happens to fees with increases/decreases in the population? 12. Please provide any fee adjustments if University Health System chooses to contract with you for both FSA and COBRA services. Banking 13. Discuss banking arrangements. 14. Do you provide a year end accounting of both fees and claims? 15. Describe all penalties affiliated with the banking arrangements? 16. What reports can you provide? Please include samples and indicate if there are any fees associated with reporting services. Administrative Services (Please confirm that you will be able to provide the listed services and any fees if applicable.) 17. University Health System will require Summary Plan Description and Plan Document preparation using vendor s standard document template to formulate a custom SPD and Plan Document for FSA only. (Provide a copy of a standard SPD/Plan Document) 18. Please provide a sample new member packet and any informational material employees would receive. 19. Please confirm that the carrier will assume all mailing responsibility to the employee. If University Health System will be required to perform any mailings to employees, please specify. 20. A Senior Account Executive who has authority to act on behalf of the company must be assigned to this account. This person must have the authority to make decisions regarding company policy, the ability to obtain same-day decisions, and at least three years experience as an account executive with 5,000 or more eligible employees. During the initial implementation and during the first 6 months after implementation the Health System Benefits staff will require two Account Executives. 21. The administrator must have approval from the Benefits Manager and/or Human Resources Director prior to any direct mass mailings to employees. This would not apply to something as general as a plan s newsletter, but would apply to virtually all other materials supplied to University Health System members. General 22. How long have you been providing FSA administration? 23. Do you currently administer FSA benefits for another company similar in size to University Health System?

6 24. Please attach a copy of your Affirmative Action Plan/Policy. Only carriers with an Affirmative Action Plan/Policy will be considered. 25. Your proposal must indicate any and all conditions which are placed on multiple year guarantees. 26. Will invoices be received by mail or electronically each month? Fees will be paid monthly to the carrier with a 45-day grace period. 27. Do you maintain a website that is accessible to plan participants? What information is available to participants via the website? Can a demo website address be provided? 28. What administrative responsibility will the carrier have and what responsibility will University Health System have? 29. How will University Health System communicate eligibility information to the carrier? Can everything be done electronically via weekly/monthly file feeds?

7 COBRA Questionnaire Please submit/respond to the below questions. (Items left blank or incomplete responses will cause the proposal to be rejected) Provide your fees associated with administering this plan. Fees should be stated as either a per employee per month fee or should be stated as a flat monthly fee if applicable. Fees quoted should be guaranteed for either a three year term with an option to renew for one additional year or a four year term and should assume no minimum participation requirements. Provide any assumptions underlying your fees. COBRA Setup/Transition One Time (Per Participant) Initial Cobra Notice (Per Letter Per Month) COBRA monthly continuant (Per Participant Per Month) Open Enrollment for COBRA Participants (Per Participant per year) The following processes and functions occur for COBRA participants during open enrollment: Preparation, duplication and mailing of all materials Receipt and tracking of all enrollment forms Handling all customer service calls from participants Input of all data into the system Reporting of all eligibility to the carriers Generation of all new payment coupons to participants Reporting of all activity to client COBRA qualifying event letters are sent within five Fees (specify if fees are monthly, one-time or annual etc.) Provide a description of how this service will be administered.

8 business days upon receiving notification from an employer. These are sent directly to the COBRA eligible participant. Premium Reconciliation (Per Plan Per Month) New hire/newly eligible notices (potential separate mailings to family unit) HIPAA Certificate of Creditable Coverage 60-day COBRA expiration Forwarding/unbundling premiums to various health plans Premium grace letters On-line access fee Shipping and handling fees Other (i.e. Broker fees, reporting) Explain University Health System is asking for these fees in order to determine which administrative responsibilities it may or may not pass on to the administrator. 1. What happens to fees with increases/decreases in the population? 2. What other criteria affect fees? 3. Please provide any fee adjustments if the Health System chooses to contract with you for both FSA and COBRA services. Installation 4.Describe the manner in which the change in COBRA administrator would be communicated to current participants. Provide samples of materials that will be used. Also, can materials be customized to meet University Health System requirements? 5. Describe how your telephone and answering system will handle the anticipated call volume. 6. Describe the days of the week and hours of operation for the customer service center. Also, describe the staffing for member services? What are the staffing ratios? 7. What will you do to assist during implementation?

9 Banking 8. Discuss banking arrangements. Administrative Services (Please confirm that you will be able to provided the listed services and any fees if applicable) 9. University Health System will require Summary Plan Description and Plan Document preparation using vendor s standard document template to formulate a custom SPD and Plan Document for COBRA only. Please provide sample SPD/Plan Document with your proposal. 10. Carrier must assume all mailing responsibility to employees. 11. A Senior Account Executive who has authority to act on behalf of the company must be assigned to this account. This person must have the authority to make decisions regarding company policy; the ability to obtain same-day decisions, and at least three years experience as an account executive with 5,000 or more eligible employees. During the initial implementation and during the first 6 months after implementation the Health System Benefits staff will require two Account Executives. 12. Will the COBRA administrator notify the insurance carriers when an employee elects COBRA coverage or will University Health System be required to do this? 13. What administrative responsibility will the carrier have and what responsibility will University Health System have? General 14. How long have you been providing COBRA administration? 15. Do you currently administer COBRA benefits for another company similar in size to University Health System? 16. Please attach a copy of your Affirmative Action Plan/Policy. Only carriers with an Affirmative Action Plan/Policy will be considered. 17. Your proposal must indicate any and all conditions which are placed on multiple year guarantees. 18. Will invoices be received by mail or electronically each month? Fees will be paid monthly to the carrier with a 45-day grace period. 19. Do you maintain a website that is accessible to plan participants? What information is available to participants via the website? 20. How will University Health System communicate eligibility information to the carrier? Can everything be done electronically via weekly/monthly file feeds?