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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Director of Human Resources
DATE: August 21, 2019
SUBJECT:
A Resolution Authorizing Agreement for Administrative Services with Cigna Health and Life Insurance Company (Cigna) for PPO and Value HSA(HDHP) Group Health, Prescription Benefits Management (PBM), Flexible Spending, Dental, C.O.B.R.A. and Stop Loss Plan Administration for period January 1, 2020 through December 31, 2020.
PURPOSE:
To authorize an agreement for third-party administrative services (TPA) with Cigna for the City's PPO and Value HSA(HDHP) health insurance plan, dental insurance, prescription benefits management (PBM), flexible spending, C.O.B.R.A. and stop loss insurance coverage.
BACKGROUND:
Cigna has been the City's third-party administrator for the City's PPO, Value HSA(HDHP), dental, PBM, flexible spending, C.O.B.R.A. and stop loss coverage for participating employees, retirees and their dependents since January 2016. The PEPM (per employee per month) fee for 2019 was $30.83.
DISCUSSION:
The City evaluated Aetna, Blue Cross Blue Shield of Illinois, CIGNA, and United Healthcare in the Spring/Summer of 2019 for the 2020 plan year. The evaluation highlighted that Aetna, Blue Cross Blue Shield(BCBS), Cigna and UHC all have comparable PPO networks, however BCBS and UHC declined to update their network analysis for 2019.
The following is the result of the negotiations:
The administration fee increased slightly to $31.44 for 2020. The One Guide Program which was provided at no cost in 2019 will cost $3.50 per employee per month in 2020.
The Rx rebates are increasing approximately $100,000. In addition, the city will receive $20,000 to put towards wellness initiatives and receive $10,000 for communication.
Human Resources is seeking approval to enter into a one (1) year agreement with Cigna.
IMPACT STATEMENT:
No impact.
RECOMMENDATIONS:
Place on the Finance Committee agenda for approval to City Council.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing Agreement for Administrative Services with Cigna Health and Life Insurance Company (Cigna) for PPO and Value HSA(HDHP) Group Health, Prescription Benefits Management (PBM), Flexible Spending, Dental, C.O.B.R.A. and Stop Loss Plan Administration for period January 1, 2020 through December 31, 2020.
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WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREAS, it is in the best interests of the City of Aurora to enter into a contractual relationship by and between the City of Aurora and Cigna for administration of PPO group health plan administration for City employees and retirees; and:
WHEREAS, it is desirable to have Cigna administer the Preferred Provider Organization (PPO) plan, Value HSA(HDHP), dental, flexible spending accounts, prescription benefits program, COBRA, and HIPAA; and
WHEREAS, the 2020 proposed City budget will provide funding for this item in employee health account numbers 602-0000-410.28-02; 602-0000-410.28-04; 602-0000-410.28-21; and retiree health account numbers 704-0000-410.28-52; 704-0000-410.28.54; 704-0000-410.28-62; 704-0000-410.28-64; 704-0000-410.28-72 and 704-0000-410.28-74.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: I. That the Mayor is hereby authorized to enter into an administration contract with Cigna.
II. That said contract is for the period January 1, 2020 through December 31, 2020.