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Department of Employee Trust Funds
May 18, 2016

Group Insurance Board Reviews
Vendor Proposal Requirements for Self-Insurance

ETF and Segal Consulting presented to the Group Insurance Board today requirements for vendor proposals for self-insurance and other efforts that will affect the state’s health insurance program.

Earlier this year the GIB approved limited benefit changes for 2017 and moving forward with the evaluation of self-insurance and a regional/statewide program structure, as recommended by Segal, the board’s health care benefits consultant. Self-insurance would replace the current fully-insured program in 2018, if approved by the board this fall.

The self-insurance Request for Proposal is scheduled to be issued in July and vendor proposals due in September. The RFP process includes two opportunities for the state’s 17 health insurers and prospective vendors to provide feedback on technical components of the RFP, including a Request for Comment and a Request for Information. The RFC responses were compiled earlier this month and the RFI will occur in June.

“The rationale is to ensure ETF issues an RFP with clear requirements and data specifications that will attract a strong pool of prospective vendors,” stated Lisa Ellinger, Director of the Office of Strategic Health Policy, in a memo to the board.

The RFP will collect necessary data to bring the GIB various program structure alternatives for consideration. Any self-insurance contracts with third party administrators must be sent to the Joint Committee on Finance for review, as required by 2015 Act 119. The JCF has the authority to deny the contract(s) or take no action, with the latter option allowing the process to continue.

Segal will assist ETF staff with developing the RFP and evaluating vendor proposals, such as provider network access and disruption, market pricing and projected cost savings compared to future costs of the current fully-insured program. There is also a focus on a vendor’s ability to achieve performance standards for quality of care and reporting requirements.

The state currently has more than 250,000 members and dependents enrolled in the program and self-insures pharmacy, dental and a small portion of health insurance coverage. There are both non-financial and financial advantages of self-insurance.

Other Vendor Proposals

  • Wellness and Disease Management Vendor – The RFP was issued in April; vendor proposals are due at the end of May; vendor selection will be in July.
  • Data Warehousing and Business Intelligence Vendor – Vendors will have the opportunity to provide feedback through an RFI prior to the RFP being issued in June; vendor proposals are due in August; vendor selection will be in November.
  • Pharmacy Benefit Manager – The contract with the current PBM, Navitus Health Solutions, expires December 31, 2017. The RFP will be issued in November; vendor proposals are due in February 2017; vendor selection will be in May 2017.

The GIB will hold a special closed session meeting on July 12 for the selection of the wellness and disease management vendor. Upcoming regularly scheduled board meetings are set for August 16 and November 15.

For future updates, watch our website or follow ETF on Twitter. You can also subscribe to It’s Your Choice e-alerts for information on health insurance benefits and health and wellness related topics.

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