Strategy & Process in Five Steps
The Value of Strategic Bid Support
The Group Medicare renewal season is an opportunity for groups to evaluate their plan performance and initiate a market check. Bid support on health plan options should be strategic with complex data analysis and specialized expertise. In our latest industry blog, our AHIP-Certified Proposal Managers offer a high-level summary of effective bid support and strategy for delivering to broker and consultant partners and union and employer clients.
Start to Finish, Our Process Has Five Steps:
1. Population & Health Plan Analysis
2. Plan Design
3. Quote Request Forms (QRFs)
4. Bidding & Negotiation
5. Proposal Creation
1. Population & Health Plan Analysis
Bid support strategy begins with understanding a group’s current (or in-force) health plan and retiree population. Our Proposal Managers first review documents provided by the broker, consultant, or group plan sponsor: census, plan design, and claims data.
Census
A group census is a spreadsheet file containing records of all Medicare-eligible members, including retirees, spouses, and dependents. For quoting purposes, these three demographics are necessary for every member:
1. Gender
2. Full date of birth
3. Zip code
This data can include these helpful details:
- Plan breakout/designation (if the group sponsors different plans, such as a high-low options plan)
- Spousal indication
Proposal Managers review the census with a focus on members younger than 65 years old. To be Medicare-eligible and pre-65, a retired employee would have to be disabled. Spouses and dependents of a retired employee who are younger than 65 would also have to be disabled to be eligible for Medicare coverage. Our Proposal Managers need to determine how many individuals listed on the census are disabled. We do our due diligence for our carrier partners so they can understand the risks involved with insuring a given population. Disability is not uncommon in labor unions where workers put their bodies through a lot of physical stress. If a group’s population is composed of less than 10% disabled individuals, it doesn’t need to be called out to the carrier.
Collecting accurate data is critical. If the member count on a new plan enrollment report deviates more than 10% from what we provided in the census, an insurance carrier can re-rate the group. Differences between projected and actual member enrollment can also lead to unexpectedly high renewal rates.
Plan Design
Plan design documents are required for comparison purposes. A Summary of Benefits (SOB) and the more lengthy Evidence of Coverage (EOC) are health plan documents that outline a group’s current benefits. For groups with supplemental insurance plans, a Summary Plan Description (SPD) describes how a group Supplement to Medicare plan coordinates with Original Medicare.
Claims Data
Claims data often provides valuable insights into a member population and how a group plan fully operates. It is always helpful, and in some cases, required. Our Proposal Managers require claims data for bids on groups upwards of 300 lives and bids that need a disruption report. Several of our carrier partners also require claims data for MAPD plan bids.
Manual vs. Experience Rating
Without claims data, a carrier usually provides “manual” rating for the group based on standardized categories of risk (like age, geographic location, industry, etc.) The rate will be conservative from a risk standpoint. However, if the carrier can get access to detailed claims data showing medical utilization and prescription drug spend, it can often provide “experience” rating based directly on the group’s historical claims. Experience rating for a group with an average amount of risk often results in more targeted and competitive pricing.
Medical Claims Data Needed for Experience Rating
- Member counts by month
- Medical costs (status of paid or incurred should be specified)
Pharmacy Claims Data Needed for Experience Rating
- Unique member ID
- Pharmacy ID
- NDCs (National Drug Codes)
- Average Wholesale Prices (AWPs)
- Dispensing fees
- Co-pays
- Taxes
- Plan paid
- Dispense date
- Retail vs. mail indicator
- Supply amounts
- Quantity or units dispensed
- Tier level
2. Plan Design
Carrier Selection
We have strategic partnerships with carriers and health plans, both nationally and regionally. For context, we engaged with 27 insurance carriers for the 2026 benefit year. Having a range of relationships allows for more flexibility with carrier selection.
Selection Criteria
1. Location of group’s primary address (fund office or headquarters)
2. Product/s we are offering
3. Group needs, preferences & existing relationships
Provider Network Adequacy for Group Medicare Advantage Plans
If bidding on a Group Medicare Advantage (MA) plan, carriers use the group’s primary address to ensure that they meet a service-area requirement. Generally, the MA plan will need to have a direct contracting network available to at least 51% of a union or employer’s Medicare-eligible members in order to bid, per the requirement by the Centers for Medicare & Medicaid Services (CMS).
Evaluation for Potential Disruption
When transitioning from one health plan to another, there can be changes in coverage. Our Proposal Managers evaluate potential disruption, or changes in coverage that disrupt a member’s access to their usual care. When selecting a carrier, they determine if a disruption report, medical and/or prescription drug, will be necessary. If so, we will need to provide detailed claims data with our request.
Product Selection
We offer a full range of Group Medicare plan products:
- Group Medicare Advantage (MA) and Medicare Advantage with Prescription Drug (MAPD)
- Medicare Prescription Drug Plan (PDP)
- Supplement to Medicare
- Coordination of Benefits (COB)
Health Benefits & Stakeholder Goals
Our Proposals team always looks for significant cost savings with equal or better benefits. Outside of savings, we need to understand the group’s motivations for seeking a market check. Are there pain points to address? Are there areas where current spending may not align with plan intent? Does the group have member advocacy, and what are the service levels? Where can our end-to-end RetireeFirst solution bring the most value?
Proposal Managers meet with our Regional Vice Presidents (RVPs), who are in regular contact with our broker and consultant partners and the plan sponsor stakeholders. Our team discusses short and long-term goals for the group, the needs and preferences of their members, and then structure health benefits accordingly.
3. Quote Request Forms
Once Proposal Managers have what they need for a Quote Request Form (QRF), they email carriers with document attachments and detailed specifications. Each email to a carrier is product-specific, so they can respond separately with each bid. We ask that carriers respond to our request within 72 hours if they intend to bid or pass.
Quote Requests Include:
- Census with any Protected Health Information (PHI) removed
- Current plan design documents
- Employer contribution
- Enrollment structure (whether voluntary or auto-enroll)
- Primary address of the group
- Our plan design, benefits, and effective date to bid
- A group’s desired outcomes and primary focus
- Request for a disruption report, if needed
- Deadline for their bid
Group Contribution & Enrollment Structure
A group’s contribution to cost could impact a carrier’s rate. The assumption is that the higher the contribution, the lower the chance that retirees may exit the group plan and purchase a plan on their own from the individual market. Ideally for a carrier, the group would contribute 100% of the group plan rate. Some carriers only bid if the sponsor’s contribution is at least 50%.
There can be a similar impact for enrollment structure, as there is a higher chance of a larger group if members and “age-ins” (who turn 65 years old and age into Medicare) are automatically enrolled rather than needing to voluntarily opt-in. Factors such as these can affect the size of a risk pool and should be communicated to carriers.
4. Bidding & Negotiation
A carrier partner first replies if they intend to pass (referred to as a DNQ, or Did Not Quote) or bid. If bidding, they may ask questions and/or request additional data before sending their bid.
Carrier Bids Can Include:
- Proposed plan summary
- Geo Access Report
- Disruption report (if requested)
- Pricing and stipulations
- Performance guarantee or implementation credit (groups 1k+)
Pricing from Illustrative to Final Rates
Group Medicare plan pricing can evolve throughout the bidding cycle. Some carriers begin with illustrative rates as projections. This signals 1) a willingness for the carrier to bid on the group and 2) a benchmark of where rates will land. After CMS releases the Rate Announcement (or Final Notice) in early April, some carriers firm up their rates. Others may wait until after CMS releases the Part D national average monthly bid amount in late July to early August. This release is based on the average of all individual Medicare plan bids and enables carriers to determine the direct subsidy component used in Part D payment calculations. Competitive situations reduced to one or two carriers versus the in-force plan can lead to a request for Best and Final Offers (BAFOs) from the carriers.
Geo Access Report
Roughly a quarter of our bids include a Geo Access Report with a snapshot of a plan’s in-network provider coverage. These reports generally show the percentage of a group’s retirees that:
- Have two primary care providers within a given range (typically 5–10 miles)
- Have two specialists within a given range (typically 10 miles)
- Have a hospital within a given range (typically 15 miles)
Geo Access Reports give a very basic view of network strength and have limitations, such as not being provider-specific or including out-of network providers.
Medical Disruption Reports
Carriers can run a report that cross-references detailed medical claims to determine if procedures, services, and providers that members have utilized recently will be covered under their new plan. We would need to provide the provider’s name, address, type, and tax ID. Carriers can then categorize providers into four categories that specify if they are in-network and/or accepting the new insurance:
1. Contracted Provider (CP)
2. Non-Contracted but Accepted (NCA)
3. Non-Contracted but Accepted Assumed (NCAA)
4. Non-Contracted and Non-Accepting (NCNA)
Our analysis shows the total number of providers in each of these categories, with a percentage of the total. We make assumptions known and provide the number and percentage of provider records included and excluded. For hospital disruption, we provide the number of locations identified as in-network and out-of-network and list their names.
Prescription Drug (Formulary) Disruption Reports
A plan’s list of covered drugs is called a formulary. It can include brand-name drugs and generic drugs, as well as original biological products and biosimilars. Formulary disruption is a more common issue than medical disruption, but less of a concern. One reason it may not be as concerning is the out-of-pocket (OOP) spending cap for the Medicare Part D defined standard benefit. In 2027, the Part D defined standard benefit cap is $2,400 to safeguard members’ OOP spending on covered prescription drugs.
Formulary disruption reports can get very complicated. Our table analysis can have conditional formatting to show cell values for positive, neutral, or negative coverage changes for tiers 1–5, Non-Formulary/Non-Covered Drugs, Non-Part D drugs, and Part B drugs. For the most frequently used drugs based on utilization, we can list the medication name, the number of unique members with a prescription, the number of claims tied to the medication, and the names of covered alternative medications for substitution. In short, Proposal Managers can tailor the level of detail as needed to prepare the group.
Implementation Credit & Performance Guarantee
An implementation credit for a large group is essentially a further incentive for the group to transition. A carrier can offer a credit: a flat dollar amount, a per-member amount, or a credit against administrative fees or rates. A performance guarantee for a large group is an accountability mechanism. The carrier contractually commits to hit specific service-level targets. If the carrier misses the agreed targets, it pays penalties back to the group sponsor.
Bid Selection
As bids are received, their information is pulled into our CRM platform and evaluated. Proposal Managers compare rates, disruption, and benefit deviations. In collaboration with the RVP, some bids are disqualified and others may need further discussion and revisions with the carrier.
5. Proposal Creation
A proposal format will depend on our role and final delivery. When working with a broker or consultant partner, we can be front-facing and present the proposal to the group, or we can stay behind the scenes supporting their efforts.
Layouts for Meaningful Comparisons
Our proposal template layouts feature side-by-side columns for ease of comparison between plans. A financial analysis table compares the current plan, the current plan renewal for the upcoming plan year, and all the plan options for the upcoming plan year by monthly rates and total annualized cost. We show the per member per month (PMPM) differential, the percent of change, and total annualized savings with each option.
RetireeFirst High-Touch Services
Reducing costs and maximizing benefits is just the beginning of our value. RetireeFirst for Groups is the only end-to-end solution that designs, implements, manages, and administers group retiree benefits. Our solution includes on-going client support and member advocacy at world-class service levels.
Deadlines & Timelines
After proposal presentation or delivery, some plans may need additional tweaks from the carrier before a bid can be accepted. Considering implementation takes at least 90 days for an MA or MAPD plan and 60 days for a Supplement to Medicare or COB plan, staying ahead of the bidding cycle and meeting milestones is essential.
Need Bid Support & Strategy?
If you are a benefits broker, consultant, or group plan sponsor, connect with us today.
