Vermont signed a revised contract with technology firm CGI this week, setting up a timeline for completing the state’s online health insurance marketplace over the summer.
The revised contract says the so-called “change of circumstance” function, which allows people to fix mistakes or update their application or coverage online, must be operable by May 21.
Small businesses, which are currently enrolled directly with the insurance carriers participating in the exchange, must be able to use the website by July 2, according to the new contract.
The revised contract includes an additional $2 million in penalties if CGI is unable to meet the new deadlines. In signing the new deal, CGI also waived its right to contest the $5 million in liquidated damage penalties the state has already assessed over problems with Vermont Health Connect.
Vermont’s contract with CGI is worth $84 million, with $54 million slated for initial development and the other $30 million for ongoing maintenance and operations during website’s first two years.
State officials said Friday that $54.1 million has been paid to CGI.
Lawrence Miller, secretary of Commerce and Economic Development, was reassigned by the governor in January to help right the exchange’s listing ship in the months after the rollout pushed it onto the rocks.
One of his first considerations was whether Vermont should stick with CGI, or look for a different vendor to complete the work.
The federal government, and more recently Massachusetts, chose to jettison CGI, and other states that built their own exchanges have, or are considering, dumping their contractors.
Despite calls from Republican lawmakers for Vermont to do the same, Miller said the state decided the disruption that would result from dumping CGI created greater risk than working cooperatively to reach a revised contract.
Vermont’s original contract with CGI anticipated one phase of development, moving into maintenance and operation after the Oct. 1, 2013, launch date.
When it became clear the website would not be completed, the state chose put off certain functions, but the contract with CGI was never revised, Miller said.
“When the process of breaking the work out into multiple phases and managing the scope began, it was never really formalized,” Miller said, “So the contract that was in place no longer matched the reality of where we were.”
Vermont pressed on in that limbo state for six months, enduring bad press and public’s frustration, throughout the exchange’s first open enrollment period, which ended this week.
The state is offering a grace period for those who attempted to enroll before the March 31 deadline, but could not complete the process in time.
Despite the website’s deficiencies, Vermont has managed to transition tens of thousands of people into health coverage through the exchange, due in part to contingencies that were put in place because of the website’s struggles.
There are 48,150 Vermonters who received coverage through the exchange, about half of those qualified for Medicaid. That doesn’t include another 30,000 to 40,000 people who were directly enrolled in employer-sponsored coverage by the insurers.
It’s impossible to know how many Vermonters on the individual market successfully used the website to obtain coverage, because some enrolled by calling the customer service line or relied on navigators.
Gov. Peter Shumlin has often said Vermont should be proud that is has the highest per capita enrollment of any state in the nation, but that’s the result of policy choices more than a well-functioning exchange.
Vermont chose to make Vermont Health Connect the only place to purchase individual insurance, while in most states there are other options. That choice was made to protect insurers from unacceptable levels of risk that would have resulted if only Vermonters seeking subsidies used the exchange.
In addition, Vermont is the only state to force small businesses into the exchange, but in its first year, few if any small businesses will actually enroll through the website.
The new contract is built to ensure Vermont Health Connect’s website is fully operational and working smoothly well in advance of the next open enrollment period, which begins Nov. 15.
“We wanted to clearly define the work that was left, set out a clear path to get it done, and define how it would be paid for,” said Mark Larson, commissioner of the Department of Vermont Health Access.
The new penalties built into the revised contract create incentives for CGI to finish its work, and finish in timely fashion, something that the original contract did not anticipate as necessary.
It assigns a dollar value to the four remaining components and sets deadlines for their delivery. Missing those deadlines can result in up to $2 million in penalties.
However, incentives allow CGI to earn back portions of what’s lost in penalties, depending how quickly the components are completed after the deadline.
If CGI meets the final deadline, delivering small business functionality by July 2, the company can earn back half of whatever penalties were assessed to that point.
In addition to those incentives, the dates for delivering the missing functionality were determined through a conversation with CGI about when the work could reasonably be completed, Miller said, instead of attempting to meet arbitrary deadline, such as the October launch date, which was imposed by Congress.
Ultimately, the efficacy of the new contract will be determined by the results, Miller acknowledged.
“Vermonters have heard enough promises from us, we’re focused on delivering,” he said.
Correction: The number of people enrolled through small businesses was incorrect in an earlier version of this story.
