Pricing Model for Health Insurance for Locally Employed (LE) Staff

The U.S. Government is conducting market research to obtain industry feedback on the most appropriate pricing model for potential future requirements involving the provision of health insurance services for Locally Employed (LE) Staff at U.S. embassies and consulates overseas. The Government is seeking input on three possible pricing models: Firm-Fixed Price (FFP) with Economic Price Adjustment (EPA), Firm-Fixed Price (FFP) with a profit-sharing formula, and any other commercially proven pricing model. The key considerations for the pricing model include efficiency, commercial reasonableness, and actuarial fairness for both parties. Some key points to consider include: • The current pricing model used is Firm-Fixed Price (FFP) with Economic Price Adjustment (EPA), which allows for annual adjustments to health insurance premiums based on the cost experience of the covered group. • The Government is open to considering alternative pricing models, including Firm-Fixed Price (FFP) with a profit-sharing formula, which would involve the contractor and the Government sharing in cost savings or excesses based on an actuarially sound formula. • The pricing model should reduce administrative effort for both parties and comply with fiscal law requirements governing the obligation and expenditure of appropriated funds.