Third Party Administration of the NYS Flex Spending Account

Background
The New York State Office of Employee Relations (OER) is seeking proposals from qualified vendors to provide Third Party Administrator (TPA) services for the New York State Flex Spending Account (FSA).

The FSA is designed to allow eligible state employees to set aside pre-tax payroll deductions for health care, dependent care, and adoption expenses. Approximately 250,000 employees across various state agencies and public benefit corporations are eligible to participate in this program. The contract aims to ensure efficient administration of the FSA, which includes Health Care Spending Accounts, Dependent Care Advantage Accounts, and Adoption Advantage Accounts.

Work Details
The Selected Contractor will be responsible for a range of services including:
- Full administrative services for the FSA, including processing employee enrollments and claims.
- Development and management of a customized online enrollment system that allows employees to submit elections online and manage their accounts.
- Coordination with OER for compliance with IRC Sections 125 and 129.
- Processing payroll deductions through a defined interface with the Office of the State Comptroller (OSC).
- Issuing debit cards for HCSA participants and managing claims submissions and reimbursements.
- Providing customer service support and maintaining records of participant account activity.
- Conducting regular reporting on participation, claims processing, and compliance with applicable laws.

Period of Performance
The contract is anticipated to commence on February 2, 2026, and will run until December 31, 2031.

Place of Performance
Services will be performed throughout New York State as applicable to the participating employees.

Bidder Requirements
Bidders must demonstrate at least five years of experience in administering TPA services for large employers with a minimum of 100,000 eligible employees. They must comply with New York State Labor Law regarding payroll deductions, maintain all operations within the United States without subcontracting overseas, provide an irrevocable Standby Letter of Credit (SLOC), and meet specific performance guarantees outlined in the RFP.