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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Director of Human Resources
DATE: August 24, 2018
SUBJECT:
A Resolution Authorizing Agreement for Administrative Services with Cigna Health and Life Insurance Company (Cigna) for PPO Group Health, Dental, C.O.B.R.A. and Stop Loss Plan Administration for Period January 1, 2019 through December 31, 2019
PURPOSE:
To authorize an agreement for third-party administrative services (TPA) with Cigna for the City’s PPO health insurance plan, dental insurance, prescription benefits management (PBM), 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, HDHP, dental, PBM, flexible spending plan, COBRA and stop loss coverage for participating employees, retirees and their dependents since January 2016. The PEPM (Per employee per month) fee for 2018 was $30.23.
DISCUSSION:
The city evaluated Aetna, Blue Cross Blue Shield of Illinois and United Healthcare in the Spring/Summer of 2018 for the 2019 plan year. The evaluation highlighted that Aetna, Blue Cross and Cigna have comparable network costs. The city interviewed all three providers and determined that Cigna was the best choice to serve as the city's PPO provider. Cigna has proven to be a dependable and supportive partner for the city. As a cost of doing business, the PEPM increased slighty to $30.83. As of year end, PEPM was based on approximately 690 employee/retirees. The increase is offset by additional benefits including a wellness credit of $100,000 to be applied to a wellness program of the city's choosing, a 100% Rx rebate pass through to the City and new programs such as OneGuide and Motivate Me at no extra charge to members. Finally, Cigna has also agreed to waiving administration fees for 3 months in 2018 and 2 months in 2019, a savings of $123,847.00.
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 Group Health, Dental, C.O.B.R.A. and Stop Loss Plan Administration for Period January 1, 2019 through December 31, 2019
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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, HDHP, dental, Section 125 flexible spending accounts, COBRA, HIPAA and Medicare Part D; and
WHEREAS, the 2018 proposed City budget provides $503,350.00 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, 2019 through December 31, 2019.