Request for Proposals s16

REQUEST FOR PROPOSALS

Services Funded Through Division of Developmental Services Payroll and Tax Service for Consumer and Family Directed Services and Independently Employed Support Workers

Significant dates:

1/25/02 Disseminate and Publish Notice of RFP 1/25/02 RFP available to potential bidders 2/11/02 Deadline for submission of letters of interest and written questions for Bidders’Conference 2/15/02 Bidders’ Conference, 9:30 a.m., Conference Room, Weeks Building, Lower Level, Waterbury, Vermont 3/15/02 Deadline for submission of proposals 4/30/02 Award contract 7/01/02 Start of Services

A. Program Overview

The Department of Developmental and Mental Health Services is statutorily mandated to plan, coordinate, administer, monitor and evaluate state and federally funded services for people with developmental disabilities and their families in Vermont. Pursuant to this mandate, the Division of Developmental Services develops, funds, and maintains a statewide system of community- based services to Vermonters with developmental disabilities and their families. The mission of the Division is to support people with developmental disabilities to live as independently and productively as possible within their homes and communities. In support of this goal, the Division seeks to support service delivery options, which, provide consumers and their families with opportunities for increased direction of the supports they receive by employing their own support staff and directing the purchase of goods and services they need.

Through this RFP the Department seeks to identify an organization(s) which will provide efficient, cost-effective, and accessible payroll and tax services as a fiscal agent to consumers, surrogates, and independent contractors who wish to assume responsibility for employing support staff. The Department seeks to assure protection for workers employed by consumers, surrogates, or independent contractors by contracting with an organization(s) with the capacity to assure an orderly and timely system for payment of wages and payment in full of all taxes dues on behalf of workers. In addition, the organization will have the capacity to secure worker’s compensation coverage and assure payment of worker’s compensation premiums for workers employed by consumers, surrogates, or independent contractors.

Community agencies designated by the Commissioner (“designated agencies”) administer funds provided to them by the Department. The designated agency authorizes annual funding limits for each consumer and works with the consumer to decide how the funding limits will be allocated. An individualized services agreement is developed describing the support services for January 30, 2002 RFP for Payroll and Tax Service Page 1 of 11 each consumer Under agreement with a designated agency, consumers may direct some or all of their services, or may authorize a surrogate or contractor to direct services on their behalf. “Direction of services” may include the employment of support workers or directing the purchase of goods or services.

B. Definitions

“Consumer” means a person with a developmental disability who receives funding through the Division of Developmental Services.

“Family member” means a person related by blood, marriage or adoption to a consumer.

“Guardian” means a person who has been appointed by a court to exercise specified decision-making responsibility for a person.

“Surrogate” means a guardian or family member of a consumer who is directing services on behalf of the consumer by employing one or more support workers.

“Independent contractor” means a person who has a contract with a designated agency or specialized service agency to provide flexible supports or work supports to one or two consumers (e.g., a developmental home provider). An “Independent contractor” may also mean a person who has a contract with a consumer or surrogate to provide flexible supports (e.g., an independent service broker).

“Support worker” means a person who is paid to provide some or all of the supports a consumer needs to maintain community living.

“Independently employed support worker” means a support worker who is employed to provide supports to one or two consumers and whose employer is an independent contractor. An independently employed support worker is not an employee of a designated agency or specialized services agency.

“Designated agency” (DA) means a nonprofit organization designated by the Department to coordinate planning and administer funds for consumers with developmental disabilities within a region of Vermont.

“Specialized service agency” (SSA) means a nonprofit organization designated by the Department to provide or coordinate specialized services or supports for consumers with developmental disabilities.

“Employer” means a consumer, surrogate, or independent contractor who employs a support worker. An employer is responsible for selecting, scheduling, training, supervising, and terminating a worker. An employer determines the wages to be paid and the hours of employment of the support worker.

“Participant” means a consumer, surrogate or contractor who uses the services of the Payroll and Tax Service.

January 30, 2002 RFP for Payroll and Tax Service Page 2 of 11 “Participating support worker” means a support worker employed by a participant whose wages and taxes will be paid through the Payroll and Tax Service.

“Payment” means wages and taxes or benefits paid to or on behalf of a support worker or compensation for goods and services needed by the consumer.

“The Department” means the Department of Developmental and Mental Health Services.

“The Division” means the Division of Developmental Services of the Department.

“Fiscal agent” means a person or organization qualified under IRS Revenue Procedure 70-6 to pay taxes and provide payroll services on behalf of participants.

“DDMHS service category” means the type of service provided as defined by DDMHS for billing and statistical purposes. At present, the eight DDMHS service categories are: Service Planning and Coordination, Community Supports, Respite Care, Clinical Interventions, Crisis Services, Housing and Home Supports, Transportation, and Work Supports.

“Authorized contractor reimbursement” means the amount the Department has authorized the contractor to charge for the services it provides under this contract.

January 30, 2002 RFP for Payroll and Tax Service Page 3 of 11 C. Purpose of Request

The purpose of the RFP is to identify a person or organization that can provide the following services on behalf of participants: Payroll and Tax service Fiscal agent Payments for non-payroll goods and services

The intended outcome is a 12-month contract, to be effective July 1, 2002, for the performance of these services; the contract is renewable for up to four additional 12-month periods.

D. Requirements for Submission

All proposals must be submitted to:

Joseph G. Carlomagno Division of Developmental Services Department of Developmental and Mental Health Services Weeks Building 103 South Main Street Waterbury, VT 05671-2301

The bidder must submit one original and five complete copies of the proposal. All proposals must be received by the Department by 4:30 p.m. March 15, 2002.

The Department reserves the right to accept or reject any or all proposals. Staff of the Department will evaluate the proposals, and individual experts selected by the Department. If a proposal is selected, the person or organization that submitted the proposal will be invited to negotiate a contract.

E. Scope of Services

The bidder shall have necessary systems in place to implement a bi-weekly payroll service for support workers, to make miscellaneous payments as requested for goods and services, and to pay all employment-related taxes for support workers. The bidder shall meet all applicable state and federal requirements for payroll agents and fiscal intermediaries. The bidder shall have a system for securing worker’s compensation coverage. The bidder shall also have an electronic data and reporting system that provides individual information on the types of services and other expenditures paid out.

In all services provided the bidder shall have the ability and capacity to assist participants to learn about their responsibilities and to carry out their responsibilities as participants. The bidder shall adapt its procedures to reflect the fact that participants are not professionals and will need support, patience, and clear instructions to carry out their responsibilities. The bidder shall provide prompt and accessible assistance to participants through a toll-free phone line with convenient hours, FAX, Internet access, and clear written instructions. Bidders should provide a

January 30, 2002 RFP for Payroll and Tax Service Page 4 of 11 detailed description of how they will make their services accessible to and usable by participants and provide an example of written materials.

The bidder shall have the ability to communicate effectively with participants who have a wide variety of disabilities and shall provide a detailed description of its qualifications and ability to accommodate a variety of communication needs.

The bidder shall provide a detailed description of how its practices and policies will support consumer-directed services.

The services to be performed by the contractor are as follows:

Application 1. The bidder shall provide prospective participants with a simple application form, information about the responsibilities of participants, and information about the bidder’s policies and procedures.

Budgeting 2. When the bidder initiates services to a participant, and at least annually thereafter, the designated agency or specialized service agency for the consumer shall notify the bidder of the annual authorized funding limit(s) for the consumer, including the “consumer share” if any. The notice from the designated agency shall state which amounts are Medicaid billable and are to be billed to the designated agency.

3. The bidder shall bill consumers for the amounts of any “consumer share” payments. Participants who fail to make “consumer share” payments may be terminated from the program. Details about this will be included in the contract.

4. Monthly, the bidder shall provide the participant and the designated agency with a statement showing the funds paid or obligated and the balance remaining in the authorized funding limit(s). The purpose of the monthly statement is for the participant and the designated agency to know how expenditures compare with the authorized funding limit(s) and to know whether payments are above, below, or consistent with the expected authorized funding limit(s). The report shall include a list of any payroll checks, which have not been cashed within 60 days of payment.

5. The bidder shall not process any requests for payment or payroll, which exceed the authorized funding limit(s) for the consumer.

Payroll and Tax Services 6. The bidder shall arrange for and/or assist participants to obtain an employer identification number by filing IRS Form SS-4;

7. The bidder shall qualify to serve as a fiscal agent for each participant under IRS Revenue Procedure 70-6 by obtaining and submitting IRS Form 2678 and by filing any appropriate state forms required in order to be recognized by state unemployment and income tax agencies as a fiscal agent for participants.

January 30, 2002 RFP for Payroll and Tax Service Page 5 of 11 8. The bidder shall assure completion of the following documents for each participating worker, and shall provide help as needed to participants and participating workers in completing the documents:

a. I-9 employment eligibility verification form b. W-4 employee’s withholding allowance certificate c. W-5 earned income credit advance payment certificate

9. The bidder shall assist the participant to determine the wage and hour categories with respect to minimum wage, overtime pay, and taxes due for each participating worker (e.g., whether the worker is a domestic services employee, whether the companionship exemption applies, and whether the worker is an independent contractor).

10. The bidder shall assure that the employer’s share of all taxes due, including state and federal income tax, FICA, and unemployment compensation taxes are withheld, filed, and paid on time and in full for each participating worker, and shall make advance payments of federal Earned Income Credit to eligible workers. The bidder shall also process all judgments, garnishments, tax levies or related holds on a worker’s wages as may be required by local, state or federal law.

11. The bidder shall obtain workers’ compensation coverage for each participating worker who is required to have coverage. The bidder shall offer worker’s compensation coverage to other participants who wish to purchase coverage even though it may not be required.

12. The bidder shall receive verification from the designated agency that a completed background check for criminal activity and driving record was performed, which complies with Department policy, for each participating worker, and shall verify that the participant has been notified of the results of the background check.

13. The bidder shall verify that the designated agency has checked the participating worker’s name in the Adult Abuse Registry of the Department of Aging and Disabilities, and that the participating worker is not on record as having committed abuse, neglect or exploitation of an elderly or disabled adult. The bidder agrees not to provide payroll and tax services for any worker who is on record as having abused, neglected or exploited an elderly or disabled adult, or who has been barred from employment for Medicaid Fraud by the U.S. Department of Health and Human Services.

14. The bidder shall provide participants and participating workers with timesheet forms and pre-addressed, pre-stamped envelopes for submission of timesheets.

15. The bidder will prepare the payroll from timesheets submitted by participating workers and participants. The following information will be contained on each timesheet:

a. Name of support worker and worker’s Social Security number b. Name of consumer c. Name of participant (if different from b) d. Rate of pay e. Pay period January 30, 2002 RFP for Payroll and Tax Service Page 6 of 11 f. Hours worked by date g. Support workers signature, and date of signature h. Participant’s signature, and date of signature i. DDMHS service category

16. The bidder shall process timesheets as follows:

a. Inspection: The bidder shall inspect timesheets to assure that they are completed correctly. If timesheets are completed incorrectly, the bidder shall make a concerted effort to contact the participant by telephone to correct the timesheet. If unable to make telephone contact, the bidder shall mail the timesheet to the participant for correction.

b. Review: The bidder shall review the number of hours contained on timesheets and/or the dollar amounts for non-payroll requests and shall assure that the amount to be paid does not exceed the authorized funding limit(s) provided by the designated agency (See #2 above). If the amount to be paid exceeds the authorized funding limit(s), the bidder shall attempt to contact the designated agency and the participant by telephone to correct the error. If unable to do so, the bidder shall mail the timesheet or the request for non-payroll payment to the participant and designated agency with a notification of the needed correction.

17. The bidder will provide participating workers with the choice of being paid by check or direct deposit.

18. The bidder will process payroll in a manner to ensure payment to participating workers on a fixed biweekly schedule. The bidder will process timesheets for payroll within 48 hours of receiving the timesheets. Failure of the bidder to meet the schedule as specified under contract will result in a daily financial penalty in an amount to be negotiated and established by contract. The bidder will use standard payroll check stock in this process. Envelopes used to mail the payroll checks shall display the processor’s address as the return address. The check stub shall display the following information:

a. participating worker’s name b. pay period c. pay date d. hours paid (by type of service) e. hourly rate f. gross wages g. deductions h. net wages i. year to date information on wages and deductions j. Employer’s name

19. The bidder shall adjust the payroll schedule as needed to assure that paychecks are received on a consistent schedule in weeks that contain holidays.

January 30, 2002 RFP for Payroll and Tax Service Page 7 of 11 20. The bidder shall develop a process to answer questions and resolve disputes with participating workers and participants regarding the amount of paychecks and information on the payroll stub.

21. The bidder shall have a process to replace checks that have not been received by the participating worker.

22. The bidder shall provide the following tax-related services:

a. Preparation and mailing of W-2 forms and all annual tax reports required by the Internal Revenue Service and the State of Vermont, including W-5 forms b. Where applicable, assistance to the participant in completing Schedule H for reporting income of household employees c. Completion of 941 deposits d. Payment of workers’ compensation premiums due e. Payment of state and federal unemployment insurance taxes due f. Payment of any other employment-related federal and state taxes g. Completion of any other payroll-related reports or forms h. Preparation and mailing of IRS 1099 forms for independent contractors.

Payment for non-payroll goods and services 23. The bidder shall have a system for making payments for goods or services (such as mileage reimbursement, therapy bills, and payment of costs and fees) when requested by a participant.

Monthly Service Reporting 24. The bidder shall have an electronic reporting system that is compatible with DDMHS for the submission of monthly service reports for individuals participating in the payroll service.

Confidentiality 25. The bidder must demonstrate the capacity to comply with all state and federal laws and regulations relating to confidentiality of information.

Materials 26. The bidder will maintain an employer handbook, outlining the roles, responsibilities, and guidelines for being an employer participant. The bidder will update the employee handbook as needed to assure accuracy of information. This handbook will be available to potential employer participants, consumers, families, surrogates, developmental home providers, potential participating employees, designated agencies, and specialized service agencies by July 1, 2002.

Training 27. The bidder shall send a representative to any training session requested by DDMHS.

January 30, 2002 RFP for Payroll and Tax Service Page 8 of 11 F. Claims processing and reimbursement

Medicaid-billable services

The bidder shall submit invoices twice per month to the responsible designated agency or specialized service agency. The invoices shall include all wages, taxes, worker’s compensation premiums and any non-payroll goods and services.

Payroll and Tax Fees

The bidder shall submit invoices to DDMHS monthly for reimbursement for payroll and tax services provided to participants.

G. Authorized contractor reimbursement

As part of the proposal, bidder shall propose a cost effective rate of reimbursement for the services requested.

H. Cash flow

The bidder shall demonstrate the ability to maintain cash flow sufficient to pay any all payroll within the biweekly schedule and all non-payroll goods and services within 48 hours of receiving the duly authorized request from the participant.

I. Relationship to Representative Payee

The bidder shall not provide representative payee services under this contract, and any funds and accounts which the bidder may handle as a representative payee for any consumer shall be kept completely separate and shall not be commingled with any funds handled under this contract.

J. Anticipated Number of Participants

The number of participants and participating workers may fluctuate. The current number of participants is approximately 575. Bidders may propose rates based upon number of participants or based upon number of participating workers as follows:

Number of participants

(a)1 – 100 (b)100 – 200 (c)more than 200

Number of participating workers

(a)1 – 200 (b)200 – 400 (c)more than 400

K. Bid Format Proposals must not exceed ten typed pages, and must include the following:

1. Description of the organization: A brief description of the organization which includes its history, organizational structure, management personnel, computer infrastructure and January 30, 2002 RFP for Payroll and Tax Service Page 9 of 11 size, with particular emphasis upon the organization’s capacity to provide accessible, reliable, consumer-friendly services.

2. Relevant experience: A list of similar contracts of services performed by the last two years, including a brief description of each.

3. Programmatic description: A statement and discussion of the bidder’s analysis of the RFP requirements, including a proposed scope of work with an explanation of technical approaches and a detailed outline of the proposed program for executing the objectives of the RFP; identification and discussion of anticipated problem areas, together with recommended approaches for their solution; and a rationale for the proposal including an explanation as to why the intended approach submitted is better than any other approach which could be employed.

4. Reimbursement rate: An explanation of the proposed contractual reimbursement rates based upon the participation rates described in Section J above. These rates must include all fees and costs associated with the proposal requirements.

5. Resumes: Description of the qualifications, training and experience of individual staff who will be assigned to the project, and their projected roles.

6. References.

All costs incurred by the bidder during the preparation of proposals and for other procurement- related activities shall be the sole responsibility of the bidder. The State of Vermont shall not reimburse the bidder for any such costs.

L. Evaluation Criteria

Proposals shall be evaluated on the basis of the following criteria:

 Cost of services  Demonstrated experience or ability in fiscal management of payroll systems  Knowledge of or demonstrated capacity to learn about tax and payroll consequences of consumer-directed services  Demonstrated skills in communicating with consumers and families  Accessibility to participants and participating workers  Fiscal soundness as it relates to the ability to process payment requests promptly  Knowledge of demonstrated capacity to learn about tax and payroll consequences of consumer-directed services  Ability to offer or arrange for workers’ compensation coverage for participating workers

M. Customary State Contract Provisions

The bidder must agree to the Customary State Contract Provisions in Attachment A.

January 30, 2002 RFP for Payroll and Tax Service Page 10 of 11 N. Additional Information

Questions or requests for additional information should be addressed to:

Joseph G. Carlomagno Division of Developmental Services Department of Developmental and Mental Health Services Weeks Building 103 South Main Street Waterbury, VT 05671-2301 802-241-2721 Fax: 802-241-4224

January 30, 2002 RFP for Payroll and Tax Service Page 11 of 11