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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Director of Human Resources
DATE: August 21, 2019
SUBJECT:
A Resolution Authorizing a Renewal Agreement with Aetna to administer a Medicare Advantage Plan for Medicare Eligible Retirees for the Period of January 1, 2020 through December 31, 2020.
PURPOSE:
To authorize a renewal agreement with Aetna to administer a Medicare Advantage Plan for Medicare eligible retirees.
BACKGROUND:
On January 1, 2018, the City of Aurora converted the Post-65 Medicare retirees from the City's Cigna OAP health plan to Aetna's Medicare Advantage Plan. Aetna's plan is a fully insured product which shifts the risk of claims from the City's self-insured plan to Aetna. The 2017 funding of the Post-65 Medicare retirees was approximately $5,700,000.
DISCUSSION:
Under the Aetna Medicare Advantage Product, the funding has been approximately:
2018: $1,946,899
2019: $1,718,385
2020: $2,010,658
Additionally, the city’s other post-retirement benefits liability was reduced by $153.7M for the year ended December 31, 2018.
Aetna’s renewal for the Post-65 Medicare retirees assumes the same benefits. The 17% increase is due to the HIF tax being reinstated by Congress for 2020. Without the HIF tax the renewal from Aetna would be a no change to the premiums.
IMPACT STATEMENT:
No impact.
RECOMMENDATIONS:
Place on the Finance Committee calendar for approval to the City Council.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Authorizing a Renewal Agreement with Aetna to Administer a Medicare Advantage Plan for Medicare Eligible Retirees for the Period of 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 Aetna for administration of a Medicare Advantage Plan for Medicare eligible retirees; and
WHEREAS, the 2020 proposed City budget provides funding for this item in employee health account 602-0000-410-.28-02; 602-0000-410.28-04; 602-0000-410.28-21; and retiree health account numbers 704-0000-41.28-52; 704-0000-410.28-54; 704-0000-410.28-62; 704-0000-410.28-64; 704-0000-410.28.72; 704-0000-410.28-74.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Aurora, Illinois, as follows: that the Mayor if hereby authorized to enter into an agreement with Aetna for the period of January 1, 2020 through December 31, 2020.