Virginia firm keeps pact as health plans’ actuary

A Virginia firm is set to continue providing actuarial services for the health plans for teachers and state employees after the state’s procurement director overturned a decision to award the contract to another firm.

The ruling last week by state Procurement Director Edward Armstrong allows McLean, Va.-based Cheiron to keep the contract with the Department of Finance and Administration’s Employee Benefits Division that the firm has held since 2009.

Under the contract, Cheiron provides projections used by the State and Public School Life and Health Insurance Board to set rates for the plans covering about 45,000 school employees and 26,000 state employees in addition to retirees and employees’ and retirees’ spouses and dependents.

In its bid to take over the contract starting Dec. 1, Seattle-based Milliman proposed annual fees of $212,040, $24,300 more than what Cheiron proposed.

But Milliman was initially awarded the contract because it received a higher overall score according to a formula factoring in the firm’s proposed fees and its score in a technical evaluation.

Cheiron protested the award, noting that Milliman did not meet a requirement in the bid solicitation to provide legal opinions.

Cheiron said in its bid that it provides legal advice through a subcontract with Ice Miller, an Indianapolis-based law firm.

Milliman said in its bid that it “cannot issue formal legal advice” and doesn’t “regularly subcontract with law firms to provide legal advice to clients.”

The firm said it does have “ongoing relationships with several law firms and could facilitate obtaining legal advice on specific Plan issues.”

Armstrong agreed with Cheiron that Milliman’s proposal didn’t meet the requirement. No other companies submitted bids.