ADDENDUM NO. 1 THE CITY OF FREDERICK PURCHASING DEPARTMENT 111 Airport Drive East Frederick, MD (301)

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1 November 13, 2017 To: All Potential Proposers Subject: RFP 18-G, Benefit Consulting and Administration Services Consisting of: RFIs and City Response, Benefits Study, Open Enrollment Materials This addendum is made part of the solicitation documents to the same extent as though it was originally included therein. In the event of conflict with the original contract documents, the addendum shall govern over all other contract documents to the extent specified. Subsequent addendums shall govern over prior addenda only to the extent specified. The proposer shall be required to acknowledge receipt of the informational addendum by signing the acknowledgment of addendum page and including it with the proposal. Failure of a proposer to include a signed informational addendum in their proposal shall deem their proposal non-responsive, however, the City may waive this requirement if determined to be in its best interest. The City will not be responsible for any other explanation or interpretation made verbally or in writing by any other city representative. We look forward to receiving your proposals. Sincerely, The City of Frederick Keisha L. Brown, CPPB Purchasing Manager 1

2 ACKNOWLEDGEMENT OF ADDENDUM #1 The undersigned acknowledges that Addendum No.1 for RFP 18-G has been received by the undersigned and will be incorporated in all copies of said solicitation in the possession of the undersigned. It is understood that all proposals submitted in response to this project will be presumed to be based upon full knowledge of the contents of Addendum No.1. (Printed Name of Company or Individual) (Signature-Authorized Official) (Title- if applicable) (Date) 2

3 Nadia Kovacova, CWWS Business Development & Health& Wellness Manager Board of Directors HR Alliance DC THE INSURANCE EXCHANGE, INC. (301) (direct) (202) (cell) Can you please share what is your current minimum premium arrangement with your carrier (Cigna)? Our Minimum Premium Funding arrangement is as follows: 3 Cigna provides an annual premium renewal proposal (determined by reviewing our past claims history to anticipate the amount of claims we can expect to encounter each month and also considering the status of the bank account below). Employee participants elect a health plan and pay biweekly premiums via payroll deductions. Employee Premiums are deposited into a City bank account used exclusively for health insurance. Cigna has access to this account. Each month, the City pays a fixed monthly premium which covers administrative expenses, premium taxes, commissions (if any), claim payments and reserves for claims that are incurred but not paid during the policy year. City funds claim costs as they are paid by the insurer (Cigna) (up to a maximum monthly limit) and monthly premiums to cover administration. City holds our own reserves (as much as 30% of a fully-insured premium), payable upon termination. As a fully insured plan, CIGNA retains fiduciary responsibility for claim payment determinations which provides the protection of a fully insured plan with the cash flow advantages and cost savings of a self-funded plan. If claims are less than estimated, the City saves money in real time. If claims are higher than estimated, Cigna reimburses the excess claim cost (Cigna liability). For Shared Returns Minimum Premium, reimbursed claim costs are carried over and may be recovered in future years when claims are lower than expected. The amount Cigna carries forward for recovery is capped at 15% of policy year premium equivalent. After the end of each policy year, CIGNA provides a financial accounting of the policy year known as a settlement. CIGNA shows how you completed the year, either in a margin or deficit position.

4 o Margin Position: If claims are lower than expected, the resulting margin may be placed in an interest-bearing premium stabilization reserve (PSR) account to offset future plan costs or returned in the form of a check. If the City has a deficit from prior policy year, the margin will be applied to offset that deficit. o If claims are higher than expected, the City benefits from having paid the fixed premium all year long. The City s exposure is capped. CIGNA can recover the deficit from margins in future years. If reserves exist upon policy termination, reserves are paid into Cigna. Would it be possible to share approximate budget for broker services in 2018? This particular line item includes other services so sharing the budget number would not be helpful. Kevin O Neil Trion Group TM A Marsh & McLennan Agency, LLC Company P: C: F: E: kevin.o'neil@trion-mma.com W: 1. When does the benefits administration platform need to be implemented by? The implementation date will be determined once the City receives the RFP responses and reviews the proposed timelines of respondents to establish a realistic implementation schedule. 2. Can you please provide additional detail on requested Retiree administration services? What retiree administration services are currently outsourced? 4 Retiree administration - Complete Open Enrollment Services for Early Retirees (pre-65) and Medicare-eligible Retirees (e.g., Customized Open Enrollment Letters, Notification

5 of New Premium Rates (if applicable), Benefit Election Forms, Benefit Change Information In an ideal world, active employees and retirees would complete web enrollment, but there is little probability that retirees would/could web enroll. Our focus is on active employee benefits administration and benefits compliance. 3. When is the City of Frederick planning to make their decision? If the agreement with the preferred vendor can be approved at the December 21, 2017 Mayor & Board of Aldermen Public Meeting, then the selected vendor will be contacted on December 22, If not, then the next public meeting will occur in early January Bethany Janka Proposal Coordinator Bolton Partners, Inc. 36 S. Charles Street Suite 1000 Baltimore, MD P: (443) Who is currently providing the services outlined in this RFP? Staff internally 2. Are services currently being provided on a fee for service basis or through a commission arrangement (or both)? Neither at the present time. Past - fee for service. 3. What does the City see as its biggest challenge in communicating with employees about benefits and wellness? Change. Engagement. Cost increases. Technology. 4. Can you please provide details on the wellness program(s), including information on incentives or incentivized contribution formulas? Also, is a wellness technology platform currently being utilized and, if so, what system are you using? 5

6 No wellness technology platform. HR staff working with Cigna staff to implement and run programs. The City has had a wide-array of wellness programs over the years, e.g., biggest loser, biometric screening events, wellness seminars, health assessment campaigns, walking programs (10,000 step), stress management, Know Your Numbers, Flu Vaccine Clinics, Holiday Survival/Chair Massage events, Dermascan Screenings, Cooking Demos, etc. The City is nearing the conclusion of a walking program which ends in late November in which employees have logged their steps on a website and we are walking the Appalachian Trail. We have roughly 170 registered participants in this activity. 5. Has the City been satisfied with the results of its wellness program? Yes and No. Why or why not? We would like more participation. We are open to new, creative and diverse solutions that will motivate employees to participate. 6. What online benefits enrollment system does the City currently utilize (if any)? None. It s a manual paper process. This is the reason for the RFP. 7. Do employees need to access difference systems to enroll in benefits? No, but they do need to complete different paper enrollment forms. 8. Who currently provides your payroll system? Internal staff using Naviline (SunGard HTE product). Staff are working toward a January 1, 2018 implementation date for Innoprise (Harris ERP). 9. Are your ACA, Cobra, and other third parties integrated with your enrollment platform? 6 We do not have an enrollment platform. This is on our wish list for the new vendor partner.

7 10. Who currently handles ACA reporting and hours tracking for the City? Currently, the City does not have the capability to handle ACA reporting via our payroll/hris. Therefore, for the past two years, we have contracted with a vendor to handle ACA Reporting. The City maintains a manual Excel spreadsheet with monthly changes. The spreadsheet is then uploaded to the vendor s system, reviewed for errors, and IRS forms generated and mailed to affected employees. The vendor efiles on behalf of the City. It is likely this same process will occur in This is a pay-go process. 11. When was the last time an employee survey and/or focus group was conducted? If within the past few years, can you provide the findings? We conducted a benefits survey in November 2016 just before we embarked on the Benefits RFP. Findings are attached. 12. Do you have a schedule for when you expect to perform vendor RFPs? Please provide by line of coverage. The City embarked on a vendor RFP in 2016 for a benefits effective date of July 1, This was for Health/prescription, dental, vision, short- and long-term disability, group term life/ad&d/additional Life. There is no immediate urgency to perform vendor RFPs for these insurances at this time UNLESS new strategies lead to the need to do so. 13. What is your expectation for the number of on-site meetings and presentations over the course of a typical year (excluding any meetings that are the result of an RFP process)? As many as are needed to successfully to develop the relationship with the Benefits Consulting Firm and to implement a Benefits Administration System/Platform (if applicable). Initially following award of the contract to discuss plans, strategies, etc. Annually prior to Open Enrollment Period regarding renewals, plan design changes, etc. (January/February timeframe) 7

8 Once during Open Enrollment which occurs in May of each year. Fall of each year to review status of each vendor, their performance, claims trends, market trends, plan design and benefits strategies Attend Public Workshop following a comprehensive review of City benefits and benchmarking them with other like entities presentation of results and recommendations to Mayor and Board of Aldermen. (May require more than one Workshop Wednesdays at 3 p.m. ET) December/January: One meeting with Cigna for the annual account review and analytics presentation. Some business can be handled through Conference Calls / Web Meetings / Ongoing telephone and contact. 14. When was the last time you conducted a dependent eligibility verification audit? To our knowledge, the City has never conducted a Dependent Eligibility Verification Audit although this is high priority once we get this agreement in place. 15. Does the City provide its employees with personalized employee benefit statements? No, we do not at this time. We are very interested in providing employees with Employee Benefit Statements so that they better understand their Total Compensation. 16. Please provide a copy of open enrollment materials. Very basic! We provide a plan highlights side-by-side for Medical plans, any changes in dental, vision, additional life rates/vendors/plan design, and a rate sheet. We send out all of the individual enrollment forms. We have passive enrollment for Medical, Dental, Vision if there are no plan design changes. Employees must actively enroll in Flexible Spending, HSA Contributions, Add or Delete insurances or dependents during Open Enrollment. See attached. 8