LACERS – RFP Health and Welfare Consultant

September 15, 2005

Page 2

Los Angeles City Employees’ Retirement System
LACERS

REQUEST FOR PROPOSAL

HEALTH AND WELFARE CONSULTANT

DUE OCTOBER 7, 2005

3:00 P.M. PACIFIC DAYLIGHT SAVINGS TIME

REQUEST FOR PROPOSAL

LOS ANGELES CITY EMPLOYEES’ RETIREMENT SYSTEM

HEALTH AND WELAFARE CONSULTANT

I.  BACKGROUND

The LACERS Board of Administration is an authorized trustee of the City of Los Angeles in administering the retiree health benefits program. The program is delivered through LACERS Department staff and a selected panel of health plans providers to some 15,000 retirees and their dependents. Approximately two thirds of health plan enrollees are age 65 and over. LACERS staff prepares and distributes program materials and special communications, takes applications for coverage or changes in coverage according to rules developed by the Board, payroll-deducts employee premiums, posts eligibility information to the pension information system, and otherwise assists retirees in accessing the program’s benefits.

The Fund has developed plans and programs with the advice of actuaries, consultants, vendors and employees. The health program includes five medical plans – Blue Cross/PPO, Blue Cross/HMO, Kaiser/Kaiser Senior Advantage, Secure Horizons, SCAN – two dental plans – Wellpoint Dental, SafeGuard Dental – and a special caregiver program – A Solution for Caregivers – offered through PacifiCare. All health plans are fully insured. The 2005 Health Benefits Guide provides the plans, an overview of the health insurance coverage available and also identifies the Department’s current health plan providers. The guide may be found on the Department’s web site at www.lacers.org/publications.

The Fund’s retiree health programs have experienced increases in trends and utilization over the past several years similar to those experienced by other fully insured retiree organizations. Over the last two annual negotiations, however, there have been significant decreases in the aggregate cost of health insurance, owing in part to the integration of Medicare Part D funding. The Fund plans on continuing basing the information on our own claims history, while using industry norms for comparison. The Fund also anticipates implementing an incentives program for retirees with chronic illnesses and those at risk for chronic illness for Plan Year 2007 in an effort to improve quality of life and control the increase in health insurance rates.

II.  CRITERIA CONSIDERATIONS

The criteria identified below are considered by LACERS to be of greatest importance in selecting the new consulting actuary. Specific response, comment or clarification may be offered to the extent that any of these issues are not fully addressed in the written response. The ordering of these criteria does not signify the magnitude of importance.

·  Qualification and experience of the firm and the key personnel assigned to the project

·  Ability to offer superior account management support

·  Strong references

·  Clarity, brevity, and focus of the proposal in addressing issues and requirements unique to LACERS

·  Reasonableness of costs to services

III.  MINIMUM QUALIFICATIONS

A. The consultant must have at least five years of experience advising public employers or public retirement systems on health and welfare issues, including fee negotiations.

B. The personnel assigned to this account must have at least three years of experience advising municipal employers or public retirement systems on health and welfare and communications issues.

C. The consultant must carry errors and omissions coverage or must have acquired it by the effective date of the contract.

D. The firm must agree to the standard City of Los Angeles contract terms as provided in the attachments.

F.  F. The Consultant must submit the Minimum Qualifications Acknowledgement form.

IV.  RFP PROCESS

A. SEQUENCE OF EVENTS

Action / Target Dates
Release RFP / 09/15/05
Mandatory Bidders Conference / 09/23/05
Deadline to Submit Proposal / 10/07/05
Finalist interviews / 10/12/05
Selection of Consultant / 11/08//05
Contract negotiations / 11/17/05
New contract takes effect / 12/01/05

V.  GENERAL REQUIREMENTS

ALL PROPOSALS MUST COMPLY WITH THE REQUIREMENTS AND SPECIFICATIONS OUTLINED IN THIS RFP.

A. Conditions - If LACERS is unable to agree to contract terms with the proposer receiving the highest evaluation in this RFP process or if the proposer has not fulfilled all conditions of the RFP at the time of contract execution, LACERS reserves the right to terminate contract negotiations with that proposer without undertaking another RFP

process, therefore enabling the Board to negotiate with the proposer receiving the next highest evaluation.

B. Negotiations - LACERS reserves the right to negotiate a change in proposer representatives if the assigned representatives are not meeting LACERS’ needs adequately.

C. Termination – This RFP in no manner obligates LACERS to the eventual procurement of services until confirmed by a written contract. Progress toward this end is solely at the discretion of LACERS and may terminate at any time prior to the signing of a contract.

D. Withdrawal of RFP - LACERS reserves the right to cancel this RFP at any time, and to reject any and all proposals submitted in response to this RFP if LACERS determines such action or actions are in its best interest.

E.  Proposal Applicability - To allow sufficient time for contract negotiation, all prices and conditions stated in the proposal must be firm for a period of 120 days from the deadline for submission of proposals.

F.  Legal Review – LACERS expects that all proposers will agree to be bound by the terms and conditions articulated in this RFP. For this reason, it is strongly recommended that proposers have the terms and conditions contained herein reviewed with corporate counsel and that proposer concerns be brought to LACERS’ attention.

G.  Governing Law – This procurement and any agreement with proposers that may result shall be governed by the laws of the City of Los Angeles and the State of California. Submission of a proposal constitutes acceptance of this condition.

H.  Basis for Proposal - Preparation of proposals should be responsive-specific only to questions asked in the RFP.

I.  Proposal Preparation Cost - Any cost incurred by the proposer in the preparation, transmittal or presentation of any proposal or material submitted in response to this RFP will be borne solely by the proposer.

J.  Proposer Qualification – LACERS may make such investigations as necessary to determine the ability of the proposer to adhere to the items as identified within the questionnaire portion of this RFP. LACERS reserves the right to reject the proposal of any proposer who, in LACERS’ opinion, is not a responsible proposer as defined below:

“Responsible proposer” means a proposer who submits a responsive proposal and who has furnished, when required, information and data to prove that his financial resources, production and service facilities, personnel, service reputation and experience are adequate to make satisfactory delivery of the services or products described in the proposal.

K. Mandatory Bidders Conference -- A mandatory Bidders’ Conference will be held to accept questions from prospective proposers regarding this RFP. The conference has been scheduled for Friday, September 23, 2005, 10:00 a.m. at LACERS Board Room 360 E. Second Street – 8th Floor, Los Angeles, CA 90012.

The purpose of the conference is to clarify the contents of this RFP and to discuss the LACERS requirements and needs. Requirement to attend this mandatory bidders’ conference is waived if proposer certifies in writing, by fax or by mail, prior to the conference, that it is informed as to the proposal requirements.

To maximize the effectiveness of the conference, LACERS requests that, to the extent possible, proposers provide questions in writing prior to the conference. This will enable staff to prepare responses in advance. Specific questions concerning the RFP should be submitted in writing to the Contract Administrator Sandra L. Dyson () located at 360 E. Second Street, Second Floor, Los Angeles, CA 90012 or by Fax at 213-687-4174.

Additional questions may be accepted at the conference. However, responses may be deferred and provided as addenda to the RFP at a later date. Responses to additional questions submitted at the conference will be mailed to proposers attending the conference that sign-in. No questions will be accepted after the mandatory bidders’ conference.

VI. PROPOSAL REQUIREMENTS

A. TeTen (10) hard copies of the proposal shall be submitted, each in a 3-ring binder, indexed with each section separated by properly labeled tab dividers. The name of the firm shall be placed on the front cover and on the spine of each copy of the RFP binder. One copy shall be labeled “ORIGINAL” on the front cover and spine, and shall contain all original signatures. Download soft copies of the RFP and the Standard Provisions for City Contract forms at www.lacers.org.

B. In addition to the hard copy of the proposal, please provide the proposal in Microsoft Word on a CD, DVD, or 3 ½” floppy disk. A CD, DVD, or 3 ½” diskette containing the proposal should be labeled with the firm name and “RFP LACERS Health and Welfare Consultant” and placed in a sealed envelope with the firm’s name written across the front and attached or affixed inside the front cover of the original signature binder only.

C. Forms provided in this RFP must be completely filled out. If a question does not apply to you, please write in “not applicable” and then state the reason why the question does not apply to your firm.

D. Proposers must comply with the Standard Provisions for City Contracts (PSC) (Exhibit A, except for PSC 20, 24, 28 and 29). Complete and attach to your hard copy proposal the LACERS Standard Provisions for City Contracts required forms. Proposals not including these completed forms/documents will be considered non-responsive, and cannot be considered for contract. Provide all original completed forms/documents as Exhibit A in the proposal copy marked “Original” and place photocopies of these completed forms in the remaining RFP response binders as Exhibit A. Completeness, clarity and brevity are stressed in the RFP proposal binders. Proposals must be signed by an individual with the authority to bind the Proposer organization and the authority of the individual signing must be stated thereon (see “Minimum Qualifications Acknowledgement” form).

E. Additional copies of the proposal may be requested from firms selected for personal interview. These copies must be exact duplicates of the response submitted for evaluation.

F. All information requested in this RFP must be submitted in the format as specified in this RFP. Responses not meeting format requirements or that are incomplete may be rejected. Proposers are urged to be concise and accurate in the preparation of responses and to carefully proofread the final copies. The Board reserves the right, at its sole discretion, to waive minor administrative irregularities contained in any proposal.

G. The word CONFIDENTIAL should be stamped and must be clearly designated on every page in the proposal containing proprietary or trade secret information. Proposers should be aware that LACERS is subject to the Public Records Act, but will endeavor to keep these materials private. HARD COPY MAILING INSTRUCTIONS: The hard copy proposals along with the CD or 3½” floppy disk shall be sealed in packaging suitable for safe delivery which shall be clearly marked on the lower left hand corner of the front of the packaging for identification purposes:

NAME OF FIRM

LACERS HEALTH AND WELFARE CONSULTANT

With the package addressed to:

ROBERT AGUALLO, JR., GENERAL MANAGER

ATTN: SANDRA L. DYSON, CHIEF HEALTH BENEFITS ADMINISTRATOR

LOS ANGELES CITY EMPLOYEES’ RETIREMENT SYSTEM

360 EAST SECOND STREET, 2nd FLOOR

LOS ANGELES, CA 90012-4207

H.  DEADLINE: All 10 completed hard copies and CD, DVD or 3 ½ “ diskette of the final proposals must be received at LACERS’ office by 3:00 PM Pacific Daylight Savings Time on October 7, 2005. Date and time will be recorded on the proposals upon their arrival. No exceptions to this deadline will be granted.

I.  RFP GENERAL OUTLINE FORMAT: The proposers response to this proposal must be organized, indexed, and tabbed in three ring binders in the following format:

1.  Cover Page titled “RFP for LACERS Health and Welfare Consultant”

2.  Company Questionnaire

3.  Signed Minimum Qualification Warranty and Warranties

4.  Fee Proposal

5.  Questionnaire Responses

6.  Appendices

J.  The company questionnaire MUST:

1. Identify the RFP as “RFP for LACERS Health and Welfare Consultant;”

2. Identify the submitting organization;

3.  Identify the name and title of the person authorized by the organization to

contractually obligate the organization and be signed by that person;

4. Identify the names, titles and telephone numbers of persons to be contacted for clarification;

5.  Have signed and attached the included forms.

K. Within each section of the proposal, the proposer should address the items in the RFP in the order in which they appear in the RFP. Further, each question number and question in the RFP shall be repeated in its entirety before the answer.

L. Exhibits must be attached in the following order:

A - Required Standard Provisions for City Contracts Form B - Organizational Chart of Parent/Subsidiary Relationships C - Organizational Chart D - Insurance Coverage/Form ADV E - Standard Report Samples

F - Other Report Samples

G - Other Materials

Do not use, copy, or replicate in any form, the City of Los Angeles seal as this is for City of Los Angeles use only and may be considered a violation of the policies stated in the governing Charter of the City of Los Angeles.

M. Proposers may attach other materials that they feel may improve the quality of their responses. However, these should be included as items in Exhibit B.

VII. EXPLANATION OF REQUIRED SERVICES

A.  GENERAL DUTIES

1. Treat all member information as confidential. The Consultant shall treat as confidential, all data provided by LACERS or their health plan providers for purposes of the contract and as it applies to all data created, gathered, generated or acquired with the contract.

2. Seek written consent prior to public release of information resulting from the engagement. With respect to any publicity given to the consultant services provided under terms of the resulting contract, the consultant shall identify LACERS as the sponsoring agency and shall not release any information without prior approval of the General Manager of the Fund or his appointed designee. This information includes, but is not limited to, press releases, research, and reports.