State signs last major IT contracts for health benefits exchange

This week, the state of Vermont signed the last two major information technology contracts needed to implement the state’s new health insurance marketplace, or exchange, come Oct. 1.

The combined price tag for outside help to get Vermont Health Connect up and running is $15.2 million, most of which is covered by federal funding.

“We are outsourcing the design, development and implementation elements for the exchange,” said Mark Larson, commissioner of the Department of Vermont Health Access. “Having all of our players in place and doing actual work is a major milestone.”

The state signed a 12-month extension with Maximus Inc. worth $12,578,162. Maximus, which has an office in Burlington, runs the state’s call center for Medicaid programs, and it will play an increased role at the outset of the exchange.

This extension to a December 2011 contract lengthens Maximus’ contracting services to the state until June 30, 2014. The entire contract is worth $17,540,153.

The extension comprises the bulk of the contract, Larson said, because the number of people the call center will serve is expected to increase dramatically. The state estimates that 118,000 individual customers and employees at businesses with fewer than 50 workers will join the exchange. When the new marketplace first opens, Larson expects calls to last longer, and he said the department expects a higher level of customer service from the company — namely, lower wait times and fewer dropped calls.

Larson said the state chose to end the contract with Maximus in mid 2014 because his department doesn’t want to switch vendors right before or during a major influx of people onto the exchange. When that contract expires, he said, the state would put out a request for proposals via a competitive bidding process.

The other major contract that the state signed this week was with Benaissance, based out of Omaha, Neb. Benaissance will oversee premium billing on the exchange for a price of $2,622,634, from May 1, 2013, until the end of 2016.

Benaissance will work under the Canadian-based firm CGI until 2014. CGI is building and implementing Vermont’s underlying IT infrastructure for the exchange at a price of $36 million over two years.

Andrew Stein


  1. Lee Stirling :

    Assuming 625,000 people living in VT, this contract is worth $24.32 for every VT resident. It will cost more per capita when you consider those who work at institutions who have their own captive insurance may not need to use the VT Health Connect marketplace.

  2. rosemarie jackowski :

    $15.2 million could have created some of the finest dental clinics in the world. Instead we have the paper churners laughing all the way to the bank.

  3. Eric Benson :

    Correction, the total tab for outside contractors to build VT Health Connect is over $100 million, not the $15 million noted in this article.

    CGI just signed another massive multi million $ contract to build a medicaid elegibility system for VT, which is in addition to their current $36 million contract to build the Health exchange web portal.

  4. Jim Barrett :

    Most of it is covered by federal funding…… if it was a gift and not TAXES!

  5. Ron Pulcer :

    In reading over the various contracts listed above (Maximus, Benaissance and CGI, I came up with about $56.1 Million over several years. But either way, I think Eric is correct that the price tag for VT healthcare exchange is over the $15.2 million dollar figure.

    At election time, we often hear about “good paying jobs” like IT jobs from both political parties. Yet, when it comes to these jobs, the work gets outsourced.

    A few short years ago, as part of the “Challenges for Change” / Tiger Team recommendations, the Dept. of Education asked local school districts to make cuts. In Rutland City, the school board cut out the Information Technology program at Stafford Tech. Just as the use of smartphones and later tablets became more prevalent.

    So, for some young folks in high school in Vermont, they are not even getting the opportunity to explore the IT professions, while at the same time the State of Vermont is outsourcing IT jobs to Canada and Omaha, Nebraska. As an IT worker who will be retiring in about 10-15 years, this is frustrating to see the lack of opportunities for young people to study this field.

    I heard this morning on radio that as part of Immigration Reform bill being worked on in Congress, there may be an increase in the cap / quota for H1-B visas for IT, engineering and other tech jobs. While many are focused on the issue of undocumented workers from Mexico, there are other aspects to immigration reform that have to do with IT jobs. None of this is new. It has been going on for decades, but it has gotten to this point: Where are Vermont youth going when they leave Vermont? Perhaps Omaha, Nebraska! Or, they might be working in some other profession, because they did not have the opportunity to study IT in high school.

  6. Karen McCauliffe :

    To join into the discussion of the cost of setting up the exchange in VT,the early federal dollars for Vermont were $158 million (that is correct one hundred fifty eight million) to set up the Obamacare state exchange in VT. They also have received more set up grants after that and these are additional dollars also discussed in this article.

    “An Associated Press analysis of data from the U.S. Department of Health and Human Services shows Vermont has been granted more than $158 million so far in these early stages of compliance with the federal law to help set up the new regulated health care marketplace.”



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