Needs Review Not Apprvd
Intent to Award Contract Medical Third-Party Administrator—Aetna
The Department of Administration intends to award Aetna the Medical Third-Party Administrator, Benefit Manager services contract for the State of Alaska employee and retiree medical plans. A 10-day protest period will follow before the contract is awarded.
- Medical, vision, and audio services are currently provided by Aetna.
- This is a competitive bidding process.
- The new Aetna contract will take effect January 1, 2020.
- The contract is for an initial 5-year term with 5 years of optional renewal periods.
- The estimated annual cost of the contract is around $21 million.
- The selected bidder will process an estimated 2 million claims annually for nearly 90,000 policies.
The State of Alaska provides health insurance, including medical insurance, through the AlaskaCare plans to certain state employees, retirees, and their dependents, including persons vested in the Public Employee Retirement System (PERS), Teachers Retirement System (TRS), and Judicial Retirement System (JRS).
The AlaskaCare health plans provide medical, dental, vision, audio, and long-term care benefits for an estimated 90,000 policies with an annual combined spend of over $700 million. The plans are self-insured, meaning the state is responsible for paying the claims incurred, and are managed in the Division of Retirement and Benefits (Division). The Division hires contractors, or Third-Party Administrators, to administer the benefits including adjudicating claims, developing a network of providers, establishing the systems necessary to process claims, providing a call center for members, and other activities necessary to carry out the functions of a health plan.
Frequently Asked Questions
- What is a Third-Party Administrator/Medical Benefit Manager?
A Third-Party Administrator, or Medical Benefit Manager, is a company the Division hires to process AlaskaCare Medical claims. Today, these claims are processed by Aetna and they will continue to process them through the current benefit year and as the new contract takes effect on January 1, 2020.
- How will members be impacted?
Members will receive announcements regarding the new contract, but because the current vendor, Aetna, will continue to process claims under the new contract, members will not experience a change in service. Employees who make new plan elections during the November 6 – November 27, 2019 medical open enrollment may receive new ID cards to reflect their new elections.
- Why was this contract put out for bid?
Periodically the Division competitively bids these contracts through a Request For Proposal (RFP). This also gives the Division an opportunity to seek better service at lower cost for members and the plan.
- Is the Medical Benefit Manager changing?
Periodically the Division competitively bids TPA contracts through a Request for Proposal (RFP). This gives the Division an opportunity to seek better service at lower cost for members and the plan. In this case, Aetna is the current medical benefit manager, and will continue to be the medical benefit manager when the new contract takes effect.
- How was Aetna selected?
The Division conducted a competitive procurement that evaluated vendors based on a combination of competitive pricing, customer service, organizational capacity, and overall cost. This procurement mirrors the process used for both the recently issued pharmacy and dental benefit claims administrator. Evaluators included members of the retiree health plan advisory board and the health benefit evaluation committee. More information including the proposal materials are available online .
- What’s different about this procurement process?
The Division is using a “best value” type process that provides additional time prior to awarding the contract to clarify contract terms and conditions with the top ranked bidder and ensure all expectations of the State and the bidder are aligned.
Historically the contract terms have been for no more than 5 years, which has resulted in frequent vendor turnover and transitions which are disruptive for the membership and the Division staff. Per the RFP, the initial contract term for this contract will be 5 years with up to 5 years of renewals, increasing the prospective contract term length to 10 years.
- When will the new TPA contract take effect?
The Aetna contract will take effect January 1, 2020.
- Are benefits changing due to the new contract?
No. Benefits are outlined in the AlaskaCare retiree or employee insurance information booklets. The Medical Third-Party Administrator processes claims in accordance with the appropriate AlaskaCare booklet.
- Does this impact both retirees and active employees?
Yes. Aetna will process medical insurance claims for all AlaskaCare employees, retirees, and their covered dependents.
- Will members receive a new Medical Insurance Card?
Members will not receive a new ID card due to the new medical TPA contract. However, employees who make new plan elections during the November 6 – November 27, 2019 medical benefit open enrollment period may receive new ID cards to reflect their new elections.
- Who can I contact if I have more questions?
You can contact: