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Benefits Contract

Benefits Contract

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Published by tawnell
DISD RFP for leave and benefit services
DISD RFP for leave and benefit services

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Published by: tawnell on May 07, 2012
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Meeting Date: Title:

May 24, 2012 CONSIDER AND TAKE POSSIBLE ACTION TO AUTHORIZE, NEGOTIATE AND ENTER INTO A CONTRACT WITH ADP TO PROVIDE BENEFITS AND LEAVE ADMINISTRATION SERVICES (NOT TO EXCEED $2,200,000.00 ANNUALLY, OVER FIVE YEARS (GENERAL FUNDS) Benefits Administration Services & Leave of Absence Management Evaluation Ranking: 1. 2. 3. 4. 5. 6. 7. 8. ADP TCG Consulting Houston ISD SECOVA Standard Insurance Company Universe Workplace Solutions EMPYREAN AON Hewitt

The Houston Independent School District (HISD), through an Interlocal agreement, currently provides the Benefits Administration and Leave of Absence Management Services to the District. These services are being provided through Mercer Outsourcing and The Health Care Partnership (THCP). The District is currently paying approximately $4,784,000 annually to the HISD for these services. The current contract between the District and HISD to perform these services was commenced April 1st, 2009 and renews annually on the anniversary date of April 1st. The term of contract is for five years through March 31st, 2014. The District may opt out of this contract before the anniversary date and provide 60 days advance written termination. If the District were to opt out of the current arrangement with HISD effective April 1st, 2013, there would be an early termination fee of $50,000. Due to the financial challenges facing the District, the District’s Benefits and Purchasing Departments issued a Request for Proposal (RFP) #JP-203906 to determine whether the current level of services offered under the HISD Interlocal agreement warrant the present cost. The scope of services of this RFP included: administration, operational processing, communications, technology, consulting services, and offering the District the option of hiring its own benefits staff to provide operational oversight and management of the program. Consultant, Hays Companies of Texas was engaged by the District to assist in the development of the RFP. Moreover, Hays was retained to evaluate the submitted proposals and provide an objective evaluation to the

Purchasing Department and the Selection Committee. The District’s RFP process also included a Selection Committee comprised of District staff members from departments impacted by these services. Direction and oversight of the evaluation process was provided by the Purchasing Department. On March 19th, the District received a total of eight proposals and a proposed amendment from HISD. Hays then conducted an in-depth, objective evaluation of each of the proposals. The evaluation criteria used by Hays to determine the ability of each vendor to provide these services included: purchase price, the reputation of the vendor, the quality of the vendor’s services, the extent to which services meet the District’s needs, the vendor’s past relationship with the District, the total annual and longterm cost to the District. The goal of the evaluation was to narrow down the proposals to three viable finalists for the Selection Committee to evaluate. Hays identified three vendors who best met the stated objectives and evaluation criteria of the RFP. These vendors included ADP, TCG, and Secova. Hays also recommended the Selection Committee thoroughly consider the proposed amendment from HISD. On April 3rd, Hays presented a detailed analysis of the three finalists and the proposal modification to the current Interlocal agreement from HISD to the Selection Committee and Purchasing Department. It was determined that further clarification was needed from ADP, TCG, and HISD regarding their proposals and ADP and TCG should be interviewed the next week. Clarifications on many proposal issues were then obtained through a series of questions to each vendor during the week. The Selection Committee also agreed it would be in best interest of the District to further evaluate the option of hiring an internal onsite benefits staff to achieve the stated objectives as well as to provide added oversight and management for these services. On April 9th, 2012 the Selection Committee met to conduct interviews with ADP and TCG. These interview sessions served as an opportunity for the proposers to provide additional insight on the programs and services covered under their proposals. The proposers also provided a demo of their systems, highlighted new feature functions/service enhancements, and furthered clarified their answers to specific questions received from the Purchasing Department on April 4th. On April 10th, Hays provided a summary of responses from the interviews and an objective evaluation analysis to the Selection Committee to consider before performing their scoring evaluations. Hays also provided an updated cost analysis comparing the option of hiring an internal onsite benefits staff rather for these services. Over the next few days the Selection Committee performed the evaluation using a 100 point scoring form as specified in the RFP. The 100 point scoring form was tabulated in two ways depending on whether the District would hire its own onsite benefits staff or if the vendor provided.

The overall scoring as tabulated by the Purchasing Department was as follows: DISD Hire Onsite Staff Vendor Provide Onsite Staff ADP 79.10 79.10 TCG 70.98 73.77 HISD 37.68 38.57 Based on the scoring evaluation and the stated objectives of this RFP, it is proposed that ADP be awarded the contract to perform Benefits Administration and Leave of Absence Management Services for the District beginning April 1, 2013. Many considerations were made in the analysis that led up to this recommendation. Some of these considerations to recommend ADP include: 1. Annual cost savings of approximately $2,484,004 million or $12,420,000 over five years compared to the current Interlocal agreement with HISD. 2. Allow the District to remove the current onsite benefits staff being provided by THCP and hire its own from their proposal. The District may hire its own benefits staff to provide enhanced operational oversight and management of the program with approximate savings of $308,800. 3. Offer a “Low Risk/High Reward Implementation.” This means the District will not be billed for any services until the “go live” date of 4/1/2013. 4. Additional service enhancements and feature functions offered to the District will include: a. Decision Support Center – includes a medical cost calculator, medical benefits plan comparison tool, and FSA/HSA savings account estimator. b. ADP Analytics – access the impact of decision support on enrollment, analyze member buying behavior, and adapt strategy and communications based on report findings. 5. The ability to offer a comprehensive mobile technology to all District employees which will be available on IOS, Apple, and Android devices. 6. Greater Web system capability related to data management and enhancements of Web tools and capabilities to the District and employees. 7. Improvement of the Leave of Absence Management program which include greater oversight, upgraded automated processes rather than manual paperwork, and value-added FMLA consulting services to the District and employees 8. An integrated solution – no outsourcing for technology or administration as all will be performed by ADP. 9. Familiar with TRS BCBS of TX eligibility file and will be able to accommodate the District’s files to make a smooth transition. The components of the current contract include but not limited to the following: Benefits Administration Services • Administer all insurance benefits program including Flexible Spending Accounts

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Call center to build employee satisfaction, available 7:00 a.m. to 7:00 p.m. CST Web and IVR to promote self-service Simplified online enrollment , eligibility processing and life event changes 24/7 access to benefits information through the employee portal (DallasISD@YourService Web site - www.disdatyourservice.org) Manages the vendors eligibility files COBRA administration – continuation of coverage after termination Consulting services – development and evaluation of RFP for voluntary insurance, market analysis, contract negotiation and management reporting Develop benefits communication and enrollment materials Compliance with benefits related regulations Four on-site staff support for day to day operations

Leaves of Absence Management • Call center for leave of absence requests and inquiries • Processing of all leaves in compliance with FMLA and other leave related regulations • Sick Leave Bank administration – eligibility and enrollment Web Technology • Provide and manage the employee portal with benefits and employment related information • Interactive online compensation tools • Online Total Compensation Statements • Links to all benefits vendors and employee related information The current level of service from the present vendor, HISD/Mercer Outsourcing does not warrant the annual cost to the District. Despite the proposed amendment, HISD/Mercer’s amendment pricing remains exceptionally high in comparison to ADP and will cost the District approximately $1,443,000 more annually or $7,215,000 million over five years. ADP can meet all of the stated objectives of the RFP and provide the District with substantial long-term cost savings without sacrificing service or technology. Based on the analysis of the proposals received, it is recommended the District terminate the HISD Interlocal agreement and enter into an agreement with ADP to provide Benefits Administration and Leave of Absence Management Services.

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