RE: DENVER WATER REQUEST FOR PROPOSALS: JANUARY 1, 2016 EFFECTIVE DATE Basic Life and AD&D Voluntary Life and AD&D Short Term Disability Long Term Disability DATE: March 9, 2015 PLEASE PROVIDE A PROPOSAL(S) FOR THE FOLLOWING: 1. Client s name and address Denver Water 1600 W. 12 th Avenue Denver, CO 80204 2. Type of industry and general business background Denver Water is a municipal corporation and a political subdivision of the State of Colorado, under the control of a five-member Board appointed by the Mayor of Denver. As such, it is governed by the Denver Charter and other laws applicable to governmental entities. The Denver Charter grants the Board all the powers of the City and County of Denver including those granted by the Constitution and by the law of the State of Colorado and by the Charter. Specifically, the Charter gives the Board complete charge and control of a water works system and plant for supplying the City and County of Denver and its inhabitants with water for all uses and purposes. It is the largest municipal public utility in Colorado, serving water to more than one million people, about one-quarter of the state s population. 3. Eligibility Provisions BASIC LIFE and BASIC AD&D Class 1 Class 2 All full-time Discretionary employees regularly scheduled to work 20 hours or more per week. Coverage is effective on date of hire. All full-time Regular employees regularly scheduled to work 20 hours or more per week. Coverage is effective on the date Regular status is achieved (an Introductory employee is newly hired, and generally attains Regular status after approximately six (6) months of employment.
4. Eligibility Provisions VOLUNTARY LIFE and VOLUNTARY AD&D Class 1 Class 2 All full-time Discretionary employees regularly scheduled to work 20 hours or more per week. Coverage is effective on date of hire. All full-time Regular employees regularly scheduled to work 20 hours or more per week. Coverage is effective on the date Regular status is achieved (an Introductory employee is newly hired, and generally attains Regular status after approximately six (6) months of employment. Class 4 Employee and spouse amounts (as of December 31, 2006), taken over by the incumbent from the previous carrier, with non-matching Voluntary AD&D, or standalone AD&D. 5. Eligibility Provisions LONG TERM DISABILITY Class 1 Class 2 All full-time Discretionary employees regularly scheduled to work 20 hours or more per week. Coverage is effective on date of hire. All full-time Regular employees regularly scheduled to work 20 hours or more per week. Coverage is effective on the date Regular status is achieved (an Introductory employee is newly hired, and generally attains Regular status after approximately six (6) months of employment. 6. Eligibility Provisions VOLUNTARY SHORT TERM DISABILITY Class 1 Class 2 All full-time Discretionary employees regularly scheduled to work 20 hours or more per week. Coverage is effective on date of hire. All full-time Regular employees regularly scheduled to work 20 hours or more per week. Coverage is effective on the date Regular status is achieved (an Introductory employee is newly hired, and generally attains Regular status after approximately six (6) months of employment. 7. Number of eligible employees: Approximately 1,040. See Census for details. 2
8. Reason(s) for soliciting proposals: Denver Water has not bid these lines of coverage in some time, so is conducting proper due diligence to ensure they and their participating employees are receiving high quality and cost competitive services. 9. Additional Important Information: Denver Water does participate in Social Security, and does not participate in Colorado PERA. Denver Water offers a 401(k) plan, as well as a 457 plan to Regular status employees. The current LTD plan is Employer paid, on a pre-tax basis. Any LTD benefits paid are taxable. The LTD plan was previously self-funded, and there are 6 open LTD claimants whose date of disability occurred during the time the plan was self funded. Denver Water continues to fund those claims, and the chosen vendor will be required to provide Advice to Pay services on those 6 LTD claimants. Denver Water is reviewing the current Paid Time Off (PTO) program, and will likely make changes to the existing structure. So, we have requested several alternative plan design options for the Short Term Disability plan that would dovetail with the potentially restructured PTO program (the possible establishment of a PTO plan is in initial stages only; no details are available). The current Short Term Disability plan is Voluntary, with employees who elect coverage paying 100% of the premium. STD enrollees have the option to pay premium on either a Pre or Post tax basis. Denver Water would also like to look at the cost impact if they were to contribute some, or all, of the premium. Vendors quoting Voluntary STD are required to allow an annual open enrollment for currently enrolled employees who wish to increase their coverage level, with standard Evidence of Insurability requirements. Regarding the Long Term Disability plan, Denver Water is interested in the cost impact should the Long Term Disability be offered on a fully Voluntary basis, with no employer contribution. The current Basic and Voluntary Life policy and certificates make reference to Class 4 benefits / employees, however the need for a Class 4 is no longer applicable. Vendors quoting Voluntary Life and AD&D are required to allow an annual open enrollment for currently enrolled employees who wish to increase their coverage amounts, with standard Evidence of Insurability requirements Regarding the Voluntary Life and AD&D and Voluntary STD plans, should Denver Water decide to institute plan design changes, a full open enrollment will be offered to all eligible employees, including those who were previously eligible but waived 3
coverage (Late Enrollees). Standard Evidence of Insurability requirements will apply to all those who enroll. Regarding Voluntary Life and AD&D and Voluntary STD plans, should Denver Water decide not to institute plan design changes, vendors must agree to Grandfather coverage, with no underwriting / Evidence of Insurability, at the existing volumes and coverage levels for those currently enrolled in those plans. Voluntary AD&D coverage is automatically included if electing Voluntary Life. There is no separate election for Voluntary AD&D coverage. Voluntary Life coverage for Spouses and /or Children does not currently include AD&D benefits. However, Denver Water is interested in possibly adding AD&D to the Voluntary Life benefit for Spouses and Children. Vendors should provide Voluntary Life quotations with and without AD&D benefits for Spouses and Children. Basic Life Class 3 is not applicable to this RFP. You will note this class is referenced in the Basic Life policy document, however any liability for this class of insureds will remain with the incumbent. This RFP is not soliciting coverage for that class. Each Line of Coverage (LOC) being solicited must be quoted separately, however Denver Water is interested in bundling Life and Disability coverage with the same vendor. Vendors may not require any bundling of lines of coverage, and are encouraged to provide a discount if Basic Life is purchased with Disability. Denver Water is also interested in any additional services that are imbedded in either the Life coverage, or in LTD, such as Travel Assistance, pre-paid legal / legal assistance benefits, etc. Vendors proposal should clearly outline the additional services that are imbedded in the Life or LTD rates being quoted. Denver Water is also interested in a vendor who can offer Long Term Care (LTC) benefits as an optional rider to either the Life or LTD coverage. Vendors proposals must clearly indicate if any LTC benefits may be purchased, and must explicitly outline the cost and benefits of any LTC rider. Vendors proposals should clearly outline the cost and benefits of any other optional benefits that may be purchased as a rider. NOTE: Denver Water is simultaneously conducting an RFP for a standalone Employee Assistance Plan (EAP). Vendors who can offer an EAP plan should quote it as a standalone plan, not as a rider to the Life or LTD plan. 10. Plans Available for Quotation (all Fully Insured except for the LTD ATP noted): Basic Life and AD&D: Employer paid Voluntary Life and AD&D, including VT Life (no VT AD&D) coverage for Spouses and Children Long Term Disability: Employer paid Voluntary Long Term Disability Long Term Disability: Advice To Pay services only on the 6 open claimants incurred when plan was Self-funded Voluntary Short Term Disability Short Term Disability: Employer paid 4
Please see pages # 7 through 9 for instructions on plan designs to be quoted. 11. Plan year: January 1 through December 31. 12. Effective Date of Coverage: January 1, 2016. 13. Commission: All lines of coverage must be quoted NET of commission. 14. Proposal Due Date and other proposal requirements: PROPOSALS ARE DUE NO LATER THAN 4:00 PM, MOUNTAIN TIME, ON MONDAY, MARCH 23, 2015. Proposals will NOT be accepted after the proposal deadline. IN ORDER FOR YOUR PROPOSAL TO BE CONSIDERED, YOU MUST COMPLETE THE REQUIRED EXHIBITS / QUESTIONNAIRES, AND SUBMIT WITH YOUR PROPOSAL. FOR ALL ATTACHMENTS, EXHIBITS AND QUESTIONNAIRES PLEASE CONTACT GALLAGHER, AS NOTED BELOW: Krista Kelly Client Consultant Gallagher Benefit Services, Inc. krista_kelly@ajg.com 15. Vendor Questions: It is requested that questions be submitted in writing, via email, and can be directed to the following: Krista Kelly Client Consultant Gallagher Benefit Services, Inc. krista_kelly@ajg.com Dana Donovan Sr. Technical Analyst Gallagher Benefit Services, Inc. dana_donovan@ajg.com Do NOT contact the client with questions. 5
16. Number and format of proposals: Submit one (1) electronic copy (can be sent via email, but preferably on CD-ROM or flash drive) of the proposal to - Dana Donovan Sr. Technical Analyst 6399 S. Fiddler s Green Circle, Ste. 200 Greenwood Village, CO 80111 Gallagher Benefit Services, Inc. dana_donovan@ajg.com 17. Declinations Should you choose not to provide a quotation on this group, please notify Dana Donovan at Gallagher Benefit Services, via e-mail (address above), no later than the proposal deadline. We value your response. Much effort has been made to provide all necessary and accurate information. It is the sole responsibility of the proposers to ensure that they have all information necessary to complete submission of their proposals. If more information is needed, please contact the individual listed above. NOTE: ALL INFORMATION IN THIS REQUEST FOR PROPOSAL (RFP) SHOULD BE CONSIDERED PROPRIETARY AND CONFIDENTIAL, AND UNDER NO CIRCUMSTANCES, SHOULD BE RELEASED TO ANY OTHER SOURCE WITHOUT THE PRIOR CONSENT OF BOTH GALLAGHER BENEFIT SERVICES, INC. AND DENVER WATER. 6
CURRENT AND REQUESTED PLAN DESIGN(S) SEE RFP ATTACHMENTS #2 and #3 FOR COMPLETE DETAILS ON CURRENT PLANS. CURRENT PLAN Carrier: Lincoln Financial BASIC LIFE/AD&D Current Rates: Basic Life - $0.180 per $1,000 Basic AD&D - $0.025 per $1,000 Benefits Classes 1, 2, and 4: 1.5 x annual salary to a maximum of $750,000 (maximum combined with Voluntary Life / AD&D) REQUESTED PLAN OPTIONS 1. Match current plan. CURRENT PLAN Carrier: Lincoln Financial Current VT Life Rates: Class 3 The approved amount of Life insurance as of December 31, 2006, in place under the prior Basic Life selffunded plan. VOLUNTARY LIFE/AD&D Employee & Spouse: Age rated (see RFP Attachment # 2 DENVERWAT Basic Life Policy). Child: Option 1 - $1.00 per $5,000 of coverage, per Dependent unit (unit means all Dependent children, regardless of the number of Children covered) Current VT AD&D Rate: $0.025 per $1,000 7
Benefits Employee: Benefits: Dependents: Option 1: 50% of annual salary up to $750,000 maximum (combined with Basic Life/AD&D) Option 2: 1.5 X annual salary up to $750,000 maximum (combined with Basic Life/AD&D) Option 3: 2.5 X annual salary up to $750,000 maximum (combined with Basic Life/AD&D) Spouse: $10,000 increments up to $100,000 maximum. t to exceed 50% of the Employee amount. Child(ren): Birth to age 26: choice of $5,000 or $10,000 REQUESTED PLAN OPTIONS 1. Match current plan designs as closely as possible. 2. As a total replacement to all current options, quote a plan allowing Employees to elect coverage in $10,000 increments, with no regard to annual salary, up to the maximum amount you are willing to offer. 3. Employee and Spouse rates must be identical, and must be quoted on a Unismoker basis (no separate rates for Smokers versus n-smokers). LONG TERM DISABILITY CURRENT PLAN Carrier: Lincoln Financial Current Fully Insured Rates: $0.51 per $100 of covered payroll 100% Employer Paid Benefits 60% of pre-disability earnings Maximum benefit: $10,000 per month Minimum benefit: $100 per month Elimination period 84 days Own Occupation Period: 24 months Taxation: pre-tax premium (employer paid) REQUESTED PLAN OPTIONS All options should be quoted with FICA match, and without FICA match. Additionally, provide the impact to employer-paid rates should Denver Water elect to gross up the participants paycheck to pay premiums on a post-tax basis to achieve a tax free benefit. 1. Match current plan design as closely as possible. 8
2. Match current plan design as closely as possible, but quote on a 100% Voluntary basis. This option should allow enrollees the choice of paying premiums on either a Pre or Post tax basis. 3. Quote cost for Advice To Pay service for 6 open LTD claimants that are funded by Denver Water. SHORT TERM DISABILITY CURRENT PLAN Carrier: Lincoln Financial Current Rates: $0.29 per $10 of weekly benefit 100% Voluntary Benefits $100 weekly benefit increments, up to 60% of pre-disability earnings Maximum weekly benefit: $1,200 (not to exceed 60% of PDE) Minimum weekly benefit: $100 Elimination period 15 consecutive days for both injury and illness Maximum Benefit period 10 weeks Taxation: choice of Pre or Post tax REQUESTED PLAN OPTIONS Quote all of the following options on both a fully Voluntary basis, and on the basis that Denver Water makes a contribution. Proposals must clearly disclose the percentage of contribution required from Denver Water. All options should be quoted with FICA match, and without FICA match. Additionally, provide the impact to employer-paid rates should Denver Water elect to gross up the participants paycheck to pay premiums on a post-tax basis to achieve a tax free benefit. 1. Match current plan as closely as possible. 2. 60% of PDE up to $3,000 weekly, with a 15/15 Elimination period. 3. 70% of PDE up to $3,000 weekly, with a 15/15 Elimination period. 4. 60% of PDE up to $3,000 weekly, with 1 day Injury and 8 day Illness Elimination periods. 5. 70% of PDE up to $3,000 weekly, with 1 day Injury and 8 day Illness Elimination periods. 6. 60% of PDE up to $3,600 weekly, with a 15/15 Elimination period. 9
BASIC LIFE AND AD&D QUESTIONNAIRE VENDORS QUOTING BASIC LIFE / AD&D MUST COMPLETE THE FOLLOWING QUESTIONNAIRE. RESPONSES MUST BE PROVIDED IN WORD FORMAT; DO NOT CONVERT TO PDF. INSERT YOUR COMPANY S NAME HERE 1. Does your quoted Basic Life plan contain any Employee Assistance Plan (EAP) benefits? If yes, briefly describe. If yes, can the EAP benefits be carved-out, and is so, what is the affect on your quoted Basic Life rate(s)? 2. How is the basic life plan rated? Pooled Experience Rated If experience rated, is it eligible for dividends? 3. Does your basic life insurance plan include a conversion provision? Are conversion charges included in the renewal financial accounting? 4. Does your basic life insurance plan include a portability provision? If you offer Portability, do you deny ported coverage to any insured that is ill or injured at the time of application for Port? Does claims experience on ported coverage factor into the overall claims experience for the group's active employees and dependents? 5. If an insured exercises their Accelerated Benefit Option (ABO), does your company calculate interest that would have been earned on amounts paid out on the ABO, and then reduce the remaining amount of Life benefit by the interest amount? 10
6. When calculating an Accelerated Benefit Option payment, does your company first reduce the total benefit for any upcoming Age Reductions, or do you pay based on the age of the insured on the date the option is exercised? 7. When paying a normal Death Claim (not related to Accelerated Benefit Option), does your contract allow you to reduce the total benefit for any Age Reductions that would have occurred within 90 days after the date of death? 8. When your company replaces a prior group life insurance plan, are employees who were covered by the prior carrier required to be actively at work in order to be eligible for coverage on the effective date of the new plan? 9. When the "actively at work" requirement is waived, does your company include specific contract language in the certificate to support the "actively at work" exception for employees who were covered under the prior carrier's plan? 10. If you will not agree to waive the "actively at work" requirement, how do you propose mitigating the risk associated with loss of coverage for employees not "actively at work" as of the effective date? 11. When your company replaces a prior group life insurance plan, do you require a list of employees not "actively at work" as of the effective date? If you do require such a list, will you deny a claim for any individual who was not on the "not actively at work" list? 12. Are disabled employees who are not yet eligible for Waiver of Premium under the prior plan transferred to your company's succeeding plan, and is their original Date of Disability applied to your Waiver of Premium requirement? 13. If you are awarded both the Life and LTD coverages, would you automatically initiate a Life Waiver of Premium claim when LTD claims are received and approved for benefits? 11
VOLUNTARY LIFE AND AD&D QUESTIONNAIRE VENDORS QUOTING VOLUNTARY LIFE / AD&D MUST COMPLETE THE FOLLOWING QUESTIONNAIRE. RESPONSES MUST BE PROVIDED IN WORD FORMAT; DO NOT CONVERT TO PDF. INSERT YOUR COMPANY S NAME HERE: 1. Are your rates based on the experience of the group, the demographics of the group, or both? Experience Both Demographics 2. Does your voluntary life insurance plan include a conversion provision? Are conversion charges included in the renewal financial accounting? Does conversion apply to voluntary dependent life coverage? 3. Does your voluntary life insurance plan include a portability provision? If you offer Portability, do you deny ported coverage to any insured that is ill or injured at the time of application for Port? Does claims experience on ported coverage factor into the overall claims experience for the group's active employees and dependents? Does portability apply to voluntary dependent life coverage? 12
4. If an insured exercises their Accelerated Benefit Option (ABO), does your company calculate interest that would have been earned on amounts paid out on the ABO, and then reduce the remaining amount of Life benefit by the interest amount? 5. When calculating an Accelerated Benefit Option payment, does your company first reduce the total benefit for any upcoming Age Reductions, or do you pay based on the age of the insured on the date the option is exercised? 6. When paying a Death Claim, do you first reduce the total benefit for any upcoming Age Reductions that the insured would have been subject to, or do you pay the amount in force on Date of Death? 7. Is it required for the Employee to elect voluntary life coverage in order for voluntary Dependent coverage to be elected? 8. When your company replaces a prior group life insurance plan, are employees who were covered by the prior carrier required to be actively at work in order to be eligible for coverage on the effective date of the new plan? 9. When the "actively at work" requirement is waived, does your company include specific contract language in the certificate to support the "actively at work" exception for employees who were covered under the prior carrier's plan? 10. If you will not agree to waive the "actively at work" requirement, how do you propose mitigating the risk associated with loss of coverage for employees not "actively at work" as of the effective date? 13
11. When your company replaces a prior group life insurance plan, do you require a list of employees not "actively at work" as of the effective date? If you do require such a list, will you deny a claim for any individual who was not on the "not actively at work" list? 12. Are disabled employees who are not yet eligible for Waiver of Premium under the prior plan transferred to your company's succeeding plan, and is their original Date of Disability applied to your Waiver of Premium requirement? 13. When your company replaces a prior group life insurance plan, are dependents who were covered under the prior carrier's plan denied immediate coverage if confined in a hospital or medical facility? 14. Does your voluntary AD&D insurance plan include a conversion provision? 15. Does your voluntary AD&D insurance plan include a portability provision? 14
SHORT TERM DISABILITY QUESTIONNAIRE VENDORS QUOTING SHORT TERM DISABLITY MUST COMPLETE THE FOLLOWING QUESTIONNAIRE. REPSONSE MUST BE PROVIDED IN WORD FORMAT; DO NOT CONVERT TO PDF. 1. What is the minimum participation requirement to offer this plan on a fully Voluntary basis? 2. What is the minimum contribution required from Denver Water in order to offer this plan on a partially-employer paid basis? 3. Deviations from the specifications: Will your organization underwrite and administer the benefit program exactly as shown in this material? Will your organization require any additional information or impose restrictions on benefit selections? What occurrences would require your organization to change its proposed rates and fees for the proposed effective date? Please list any other items that can be considered deviations from the specifications. 4. Benefits should be payable for any non-occupational illness or injury which results in time away from work. Agree Agree Agree Disagree Disagree Disagree 5. Provide a list of your exclusions. Provided in Section. 6. If awarded both the Short and Long Term Disability contracts, you must agree to coordinate claims process with no action required of the claimant. Agree Disagree 7. What is your definition of disability? 8. What is your charge to prepare the W- 2? Included, or % increase to quoted rate 15
Do you pay the applicable FICA taxes? 9. Does your quoted contract contain language to support and administer a plan with provisions outlined in IRS ruling 2004-55? 10. What are your provisions for successive periods of disability? LONG TERM DISABILITY QUESTIONNAIRE VENDORS QUOTING LONG TERM DISABILITY MUST COMPLETE THE LTD CONTRACT COMPARISON (SEE SEPARATE EXHIBIT # TBD) AS WELL AS THE FOLLOWING QUESTIONNAIRE. RESPONSE TO THIS QUESTIONNAIRE MUST BE PROVIDED IN WORD FORMAT. DO NOT CONVERT TO PDF. 1. Does your quoted LTD plan contain any Employee Assistance Plan (EAP) benefits? If yes, briefly describe. If yes, can the EAP benefits be carved-out, and is so, what is the affect on your quoted LTD rate? 2. Are you willing to write this plan on a voluntary basis with the employees paying the full premium? Agree Disagree What is the minimum participation requirement? 3. Confirm that the pre-existing condition clause does not apply to those who are currently enrolled, and actively-at-work on the proposed policy effective date, and have satisfied any previous pre-existing condition requirements of the prior policy. Agree Disagree 4. Will you require a periodic census report? 16
If so, frequency of report? What information is required? 5. BRIEFLY describe your claim management process, and the types of personnel involved (e.g. nurse case managers, others). Describe the qualifications and experience of such personnel. Are all registered nurses? With whom do these personnel have contact (employee, employer, physician, etc.)? 6. What determines whether your (carrier s) physician will review the attending physician's statement? 7. On average, what percentage or number of disability claims or cases are referred to a physician for consultation and review? 8. Could your contract be designed to insist upon a third physician's opinion when the claimant's and your company's physicians disagree on the status of a claimant? 9. Once approved for disability benefits, how frequently is validation of continued disability required? 10. What is the process used to validate continued disability once approved? 11. What part does your company play in assisting LTD claimants to obtain Social Security disability benefit awards? 17
Do you pay out the unreduced benefit and then collect retroactively if Social Security disability is approved? Do you pay the net benefit and then pay an additional amount if Social Security is ultimately denied? 12. BRIEFLY describe your process and success rate in obtaining refunds of overpayments due to subsequent Social Security awards when full LTD benefits have previously been paid without Social Security offsets. (This would be applicable to claimants who previously worked for an employer participating in Social Security.) 13. Will you assign a dedicated claims examiner and/or disability management team to this client s account? Identify this individual and/or each team member; briefly describe his/her background and experience. 14. Do you have the capability to withhold, on behalf of the client, from benefit amounts for: FICA taxes? State taxes? Employee benefit contributions? 15. Does your quoted contract contain language to support and administer a plan with provisions outlined in IRS ruling 2004-55? 16. Indicate the percentage of premium that would be retained for incurred but unreported claims. 17. BRIEFLY explain how you establish the reserve for claimants during the elimination period. 18
18. What credibility would you assign to the client s experience? If not full credibility, please describe the development of the credibility factor. 19. Does your company review the claims and vary reserves from the tabular calculation based on known claim circumstances? If so, how often? 20. What percentage of interest is paid to or credited to the policyholder for the following reserves: Incurred but not reported? Disabled life reserve for open claims? 21. How will the expected claims be estimated? 22. BRIEFLY identify the terms and conditions of your contracts should the client terminate their contract with your company (i.e. client liability, responsibility for incurred claims, etc.). 23. When would you prepare and present a final experience accounting? 24. Quotations for fully insured long term disability coverage should be presented on a fully insured, fully pooled, non-participating basis. 25. Confirm that you will provide claims activity / experience and open and closed claims reports on a quarterly basis. Agree Agree Disagree Disagree 19
26. Confirm your ability to provide detailed open and closed claims reports with, at a minimum, the following information: Name, Gender, DOB Employer division Occupation or job classification Date of disability Cause of disability/diagnosis/injury type Basic monthly salary at disability Monthly benefit Reserve amount Date claim closed/benefits terminated 20
SIGNATURE PAGE DENVER WATER RFP FOR LIFE & DISABILITY EFFECTIVE JANUARY 1, 2016 VENDORS MUST COMPLETE THIS SECTION. The Employer s benefit plan documents which were submitted with the RFP will be the controlling documents for all claim definitions. In the absence of any identified deviations, your organization will be bound to all of the terms and conditions for claims payment and eligibility as outlined in the Employer s benefit plan documents. An Officer of your organization must sign this Signature Page. By signing, you certify that your policy will mirror the eligibility and benefits outlined in the Employer s benefit plan, unless noted in the following list of exceptions. 1. 2. 3. 4. 5. 6. Company Name: Name: Title: Phone Number: E-mail Address: Signature: Date: NOTE: In the case of an electronic proposal submission, your typed name and date above will be considered a valid signature for this RFP. 21