Module 2&3 Request For Proposal And Selecting A Service Provider Flashcards
What are the five steps in the service provider selection process?
- Assess need (what benefits)
- Selective service provider
- negotiate and finalize the contract
- transition to the service provider
- manage the service provider
In the service provider selection process, what are the three steps associated with “assessing the need?”
- what are the Organization needs
- selecting a third-party advisor
- Large service provider or small local sourcing
In the service provider selection process, what are the three steps associated with “selecting a service provider?”
- identify service providers
- develop the RFP - this may involve partnering with procurement
- Evaluating the proposals
In regard to service provider selection process, what are the three steps involved in “negotiating and finalizing the contract”
- letter of agreement/letter of intent
- The contract “sometimes referred to as statement of work”
- confidentiality agreement
In regard to service provider selection process what are the three steps in “ transition to service provider”
- logistical issues
- terminating current contracts
- Communication
Regarding the service provider selection process, what are the two steps associated with “managing the service provider?”
- build a relationship
- Monitor performance
When identifying service providers, what are three questions to ask when determining the organization needs?
- what benefit services is the organization seeking?
- should we consolidate service providers for multiple services?
- is a third-party advisor or broker needed to help us select a service provider?
What role does the third-party advisor play in identify a service provider?
Organizations use third-party advisers to guide them through the process of identifying a service provider
When using a third-party advisor to identify a service provider, what do you look for an advisor?
Technical expertise and credibility
 Modern tools and ideas
 Infrastructure support (wide list of suppliers
 Fit in chemistry with the organization
 Size of the organization
 Positive references
 transparent, and acceptable fees
What are best practices in managing the advisor relationship?
establish expectations
Fixed fee for a fixed scope
Scope changes
Do you work internally?
Hit deadlines
Volume discount
Communicate
Take ownership
Choosing a service provider selection team. Who from the organization belongs at the table?
Risk management
Human resources
Employee relations
Procurement
Information technology
Corporate attorney
Finance department
Internal communications
Current benefits provider
External consultants
Outside benefits advisor
Define selection criteria for the selection committee when selecting a service provider.
What are typical criteria?
Technical capabilities
Reporting capabilities
Cost
Relationship management
Cultural fit
References
System performance
Compliance
Customer service client services
Strategic compatibility
Define an RFI
An RFI is a request for information. It can be as simple as a one page letter, or a can be more complex.
What’s the purpose of the RFI?
The qualify or disqualify service providers in the marketplace
Helps reduce the work that may lie ahead and developing in soliciting more detailed information
What’s the typical content of an RFI?
Brief project description
Organizational background
Specific requirements
Information about service providers
General fee ranges
How to respond
What does RFP stand for and what is its purpose?
RFP stands for request for proposal
It is an invitation for service providers to provide the organization with the bid or proposal for services
Developing the RFP - What are the 4 primary objectives of the RFP development?
Created on a consistent basis
- compare bids on an equal basis
Positioning of the organization
- positions the organization in the best light to improve competitiveness of bids
Documentation of due diligence
- documents the selection process
Documentation of the project
- serves as documentation when developing the contract
RFP Content - what 8 things should be included in an RFP?
- project overview and scope
- project background (current situation)
- organizational profile / demographic
- general reporting requirements
- decision criteria
- how to respond
- RFP questions
- reference request
Who should be included in gathering data and drafting the RFP?
Decision makers and Key Influencers
Internal customers or users (such as employees)
When managing an RFP - what others should be involved in the communication / decision process
Staff (sensitive to raising expectations or lowering moral)
Other service providers (notify other service providers who may be impacted)
RFP - 3 primary Assessment tools (how are competing bids going to be assessed?)
Initial evaluation
- did bid meet specifications
- is the response clear and complete
- financial and guarantees appropriate
- any “show stoppers”
Previously established selection criteria
Weighted point system
Example:
- financials
- quality of care
- customer service
- access
Track and document RFPs - what is an example of things to include in documentation?
Service provider name
Date RFP sent
Date response received
Date declined (if declined)
In regard to outsourcing meetings - what 3 types of meetings include stakeholders, consultants, potential service providers, staff, etc.?
Follow up meetings
Potential site meetings (bringing the provider onsite)
Conversations about follow up meetings
What is the purpose of meeting the perspective service team?
Narrow the field of options before conducting a potential on-site visit or evaluation meeting
Who should be included in meeting perspective service teams?
From the service team, the sales person, the account manager, communication, specialist operations, and the technical advisor.
From the organization, a relationship manager is the liaison between the service provider and your organization. The primary point of contact.
Service provider evaluation’s should include which five things?
Network issues
Data transfer and security issues
Administrative and transaction issues
Member services
Describe objectives of the service provider evaluation debriefing
Internal debrief
Individual reactions and immediate concerns
Check level of commitment observed
Additional service provider selection subjective assessment criteria to be used in addition to the objective assessment tools
Red flags noticed by team
Relationship first impressions
Evaluations and observations
Chemistry between service team and staff
Three important objectives of performing reference checks
Speak with current and former customers
Obtain information regarding financial stability and track record
Get specific information that aligns with the scope of the job and industry
What are the five most important factors to consider when making the service provider selection decision?
Use the criteria established in the assessment step
Listen to those who are affected the most
Use aggregate in votes
Look at where bids received the most points
What are the four primary things to document when documenting the service provider selection decision?
Describe bidding approach, and how bids were
Identify the key goals and priorities, guiding the selection
Plan the length of contract renewal, and possible terms of cancellation
Document, even if only for future reference, and protection
When assessing the need to outsource a specific benefits function, what is the one thing organizations should consider?
A - whether to consolidate multiple services to one service provider
B- the results of an RFP evaluation
C- whether the bidder met Key specifications
A - whether to consolidate multiple services to one service provider
What is the primary purpose of an RFI?
A- to determine specific fees charged by service providers
B- the qualifier disqualify service providers
C- to obtain references for prospective service providers
B- the qualifier disqualify service providers
What is the purpose of an RFP?
A- disqualify service providers in the marketplace
B- to provide general fee ranges
C- to become the foundation of all further discussions and meetings with the service provider
C- to become the foundation of all further discussions and meetings with the service provider
Why would an organization use a weighted point system to evaluate perspective service providers?
A- to emphasize factors that are important to the organization
B- equally consider each factor when evaluating proposals
C- to minimize the number of factors to consider when making the decision
A- emphasize factors that are important to the organization
What should be included when presenting the final selection of a service provider to senior management?
A- short term and or long term gains for the organization
B- a list of all potential service providers given during the process
C- specific piece of communication for employees
A- short term and or long term gains for the organization
What is risk theory?
Risk theory refers to the practice of actuaries and insurers in analyzing the financial impact of a multitude of factors and plan assumptions
Why do employers by benefits plans?
Employers buying the health and welfare benefits plans to help protect employees against personal loss, resulting from
death, disability and illness
Health plan design - What are three types of risk employers are concerned with
Frequency of loss
Severity of loss
Predictability or probability of loss
What are the methods of financing insurance benefits?
Fully insured
Partially insured
Self insured
What are the disadvantages to an organization to host “fully insured” insurance benefits
Subject to state insurance, regulatory, oversight, and taxes
Plus flexibility and plan design
State common law claims
Insurance organization mark ups
What are the advantages of self insured financing of benefits plans?
Most employers, who can self-insure do so to avoid costs and gain more control over the plan
What are some important factors to consider when deciding whether to self fund an insurance plan?
Risk tolerance
Degree of predictability of cost required
Availability of cash reserves
Time in skills to administer
What is meant by the continuum of risk?
Fully self insured holds the greatest risk to the employer
As financing options, move further towards fully insured, the insurance company carries the greatest risk
Continuum of risk- define self insured
The employer assumed the financial risk for providing healthcare benefits to its employees
Continuum of risk- define minimum premium
This is the smallest acceptable premium for which an insurance company will write a policy
Continuum of risk- define retrospectively experience rated
Retrospective rating involved in adjustment based on the current policy.
Continuum of risk- define prospectively experience rated
Non-refundable- the underwriter excepts all risks and uses past claims along with demographics, trying to factors, and inflation factors to estimate future claims and arrive at a premium.
Continuum of risk- define fully pooled community rated
Requires health insurance providers to offer health insurance policies within a given territory at the same price to all people without medical underwriting, regardless of their health status
What are eight baseline components to consider at benefits plan renewal?
- Per employee per month cost
-Communication cost - Administrative costs
- Performance, guarantees, and service level fee adjustments
- Customer service levels
- Medical loss ratio
- Eligibility changes
- Workforce demographics
What are the three elements of an insured premium structure?
Margin
Expenses
Expected claim charges
In regard to administrative costs what are some characteristics of self insured plans?
- margin, Guerrier, profit, and review of mandated benefits, become potential savings for the employer
- Partially self-funded plans, reduce state, premium taxes and many government mandated benefit fees
- Stop loss, replaces the pooling charges, protecting the employer from large individual, claimants and excessive total claims
What are the two types of pension plans?
Direct benefit - pension
Defined contribution- 401(k)
Having concurrent insurance coverage may reduce overall cost. What are the five retirement coverages that can be included?
Defined benefits DB
Defined contribution DC
Social Security
Short term and long term disability
Group life insurance
Why do organizations participate in group insurance benefit process review?
Save money
- redesign benefits
- avoid expected rate increase
- opportunity to renegotiate
Improve service to employees
- address service concerns (technology or just bad service)
due dilligence
- keep existing vendor competitive
Communication - What 5 key findings should be presented to senior management?
Why we solicited proposals
Overview of proposals and evaluation
Projected savings
Recommendations
Next steps
Communication - Why we went through the process - 2 reasons.
Save Money
- redesign Benefits
- avoid expected rate increase
- opportunity to renegotiate
Improve Service to Employees
- Service Concerns
- Due Dilligence
Who assumes the most risk in a prospectively experience rated plan?
A- The employer
B- The insurer
C- The employee
D- The provider
B. The insurer
Which of the following is an advantage of a self insured plan?
A- Known Cost
B- tax advantages for life insurance
C- potentially lower cost
D- enhanced employee relations
C- potentially lower cost
In working with a third party advisor on a renewal for DC retirement plans, which of the following would be a component of the renewal process?
A. Funding Methods
B. Marketing Expenses
C. Demographic Data
D. Coverage Paid
B. Marketing Expenses
What is one of the two main reasons to go through the plan design process?
A. Accounting Requirements
B- Workforce Demographics
C- reduce Claim Fluctuation
D- improve Service
D- Improve Service
