ADDENDUM No. 3. RFP REQUEST FOR PROPOSALS FOR WORKERS COMPENSATION SERVICES November 9, 2012

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1 ADDENDUM No. 3 RFP REQUEST FOR PROPOSALS FOR WORKERS COMPENSATION SERVICES November 9, 2012 A. CLARIFICATIONS AND MODIFICATIONS TO THE RFP 1. This Addendum is posted on the West Virginia Higher Education Policy Commission (HEPC) purchasing webpage at the following URL. The name of the successful vendor(s) will also be posted on the HEPC purchasing webpage and will constitute official notification of the contract award Sealed proposals will be received until 3:00 PM, Eastern Time, November 30, 2012 by: Chief Procurement Officer RFP West Virginia Higher Education Policy Commission 1018 Kanawha Boulevard East, Suite 700 Charleston, WV Electronically transmitted (faxed or ed) proposals will not be considered. B. VENDOR QUESTIONS AND ANSWERS TO QUESTIONS: Q1. Will the responses be posted to the website or are you ing responses to participating companies? ANSWER: The answers to vendor questions will be posted at: Q2. Although your proposal does not provide the opportunity for a third party administrator to provide a stand-alone claims quote, will you also be seeking unbundled claims options? ANSWER: No. Q3. The last page of Addendum 2 shows 2012 payroll. Is this for calendar 2012, for policy year /12 or for some other period? ANSWER: The payroll is for Fiscal Year 2012 which is 7/1/11 6/30/12. Q4. Is the program now subject to a deductible? If yes, what is the deductible? Addendum No. 3, November 9, 2012 Page 1

2 ANSWER: No. Q5. West Virginia University is listed as a potential participant, but Addendum 2 does not show the loss, premium and payroll information for WVU. Can you please provide this? ANSWER: West Virginia University should be omitted as a participant in this RFP for Workers Compensation Program Services. Q6. Can you provide five (5) years of combined institutional payroll information and employee counts for the entities listed in sections 1.2 and 1.3? ANSWER: The four years provided is sufficient data. Q7. Are all of the listed colleges and universities in a current program?. Q8. Are the colleges and universities listed in the RFP currently in a group workers comp program or is this a new approach? If there is an existing group program, do all of the schools participate? If not, do the schools all have the same workers comp renewal dates or do they vary? ANSWER: The participating institutions are in a group program with the same renewal dates. West Virginia University will not be participating. Q9. The table in Addendum 2, Section B indicates that the contract is to be awarded by January 15, Is this the date by which the Commission expects to have completed both Phases 1 and 2? If not, can you provide a further breakdown of the timing of Phase 2? ANSWER: January 15, 2013 is the date that Part One will be awarded. The timing of Part Two will be provided when Part One services are completed. Q10. Are all of the listed colleges and universities committed to a new program or will each decide whether or not to join based on its quote? ANSWER: The schools listed have already expressed an interest in participating in the consortium. A list will be finalized after the broker and carrier have been selected. Q11. When does the Commission anticipate Part Two of the process will incept? ANSWER: Shortly after Part One services are completed. Q12. It appears that the Commission is considering: (1) a direct writer approach, (2) using an insurance broker to place coverage on a ground up basis, and (3) using an insurance broker to place coverage over a retention that has yet to be determined the existence of that retention may drive whether or not a TPA will be required. How will the Commission evaluate the comparative benefits of these three approaches during Part One of the RFP process? There are significant variations in the value propositions and service requirements for each. Has it retained a consultant for this purpose? Addendum No. 3, November 9, 2012 Page 2

3 ANSWER: It is anticipated that the most effective approach will result in the highest score of these criteria. The Commission has not retained a consultant as of this date. Q13. The Commission asks if the provider of the insurance program will be able to efficiently administer and process claims. Most brokers do not handle claims (there is an inherent conflict in setting reserves and then using those reserves for marketing purposes), but instead provide services associated with the selection of a TPA, suggesting appropriate contractual language and then continuing oversight and analysis of the claims handling process as part of the broker contract. This provides the client with the ability to review a number of qualified service providers rather than attaching this to the broker. Would the fact that a vendor cannot yet identify a TPA for claims handling disqualify them in Part One of the process? Q14. The Commission seeks proof of the claims handlers competency and experience with similar risks. We have numerous self-insured higher education clients who use TPAs, and also provides Workers Compensation Auditing services for a number of clients in and around West Virginia. We have the ability to opine on the competency of TPA firms in the area, but cannot share audit results. Selecting the correct TPA would be a part of our program design process. We will suggest specific TPAs who we believe would qualify for this process. Is this acceptable? Q15. Is there any kind of existing claim service agreement with a claims administrator and, if so, can we review a copy of that agreement, including claim servicing instructions? ANSWER: No. Q16. How often are claim reviews completed? ANSWER: Claim reviews are completed at least once a year. Q17. Would the fact that a vendor cannot yet respond to claims issues with a specific TPA, or a managed care company, provider network(s) and a loss control provider (inasmuch as the vendor will work with the Commission to select the best providers possible under our service model) disqualify them as a bidder in Part One of the RFP Process? Q18. Are loss prevention services currently provided by: (a) the carrier, (b) the current broker(s), or (c) on an ad hoc basis? ANSWER: Loss prevention services are currently provided by the carrier. Q19. When will the eligible institutions listed in Section 1.2 be required to decide whether they are going to utilize the consortium? Addendum No. 3, November 9, 2012 Page 3

4 ANSWER: See answer to Q10. Q20. When will the institutions be required to decide whether they are going to utilize the consortium? ANSWER: See answer to Q10. Q21. Is the RFP for West Virginia University or the Higher Education Policy Commission? ANSWER: The RFP is for the WV Higher Education Policy Commission. Q22. Does the date referenced in Addendum No. 2 for sealed proposals due of 3pm Eastern Time, November 30, 2012 refer only to Part One Requirements.. Q23. Will the deadline for PART TWO requirements be established following the November 30, 2012 date? Answer: Yes Q24. Is the Contract Awarded date of January 15, 2013 pertaining to PART ONE, PART TWO, or both? ANSWER: Part One only. Q25. Addendum No. 2 does not contain census data, general claims information, or current premium data for either the current year, or the prior years. Will this information be provided prior to the Proposal Due Date? ANSWER: No additional information will be provided in addition to the RFP and addenda. Q26. Is the requirement any (A) rating which would be inclusive of A-? Q27. Is Part One of the RFP process intended to be only for the selection of an Agency, or is Part One also to determine which carriers will be selected to participate in Part Two? ANSWER: Part One is for the selection of brokers and carriers. Q28. If a carrier does not respond to Part One, are they precluded from consideration if presented by an agent in Part Two? Addendum No. 3, November 9, 2012 Page 4

5 Q29. Can a carrier respond to the RFP as both a direct writer and also participate in Part Two through an agent?. Q30. If a carrier does not directly respond to Part One, and is also not presented by an agent as noted in sub-bullet 10, are they then precluded from participating in Part Two?. Q31. Is item 3.13 intended to be the 3 rd option for item # ? Q32. Will a final list of program participants be provided so that a final cost quotation can be provided? ANSWER: See answer to Q19. Q33. If a final list of participants is not provided in advance of the Proposal Due Date for Part Two, is the Higher Education Policy Commission under Part Two seeking a rate per payroll dollar quotation that could be applied to any participant? Q34. Since this item only applies to agents, are direct write carriers exempt from Section 3.14? Q35. Is the insurance specified in Item 6 coverage to be maintained by the vendor, or is item 6 addressing additional coverage that is to be provided as part of the program under the RFP? ANSWER: The insurance coverage specified in Section 6 is to be maintained by the vendor. Q36. Will premium and claims data be provided for WVU and any other eligible institution not currently insured by BrickStreet? ANSWER: WVU will not be participating in the consortium. Addendum No. 3, November 9, 2012 Page 5

WEST VIRGINIA HIGHER EDUCATION POLICY COMMISSION REQUEST FOR PROPOSALS FOR BOND COUNSEL

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