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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Chief Human Resources Officer
DATE: August 18, 2021
SUBJECT:
A Resolution Authorizing an Agreement with Humana to administer a Medicare Advantage Plan for Medicare Eligible Retirees for the Period of January 1, 2022 through December 31, 2022.
PURPOSE:
To authorize an agreement with Humana 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. Under the Aetna Medicare Advantage Product, the funding has been approximately:
2018: $1,946,899
2019: $1,718,385
2020: $2,010,658
2021: $1,930,599
DISCUSSION:
Aetna’s renewal for the Post-65 Medicare retirees is a -24.4% which assumes the same benefits and a rate cap of 6% for 2023. However, Assured Partners (City consultant) reviewed market options for the City of Aurora and Humana is providing a reduction in premium of -43.3% with a 12% rate cap for 2023 resulting in guaranteed savings for the City of $1,540,052 over the next two years. Following are the Medicare rate comparison for the savings:
2021* 2022 2023 Two-Year Total Two-Year Savings from current
Aetna 1,930,599 1,452,487 1,538,335 2,990,822 870,376
Humana 1,930,599 1,094,869 1,226,277 2,321,146 1,540,052
*2021 with Aetna. Both carriers provided 2-year rates for 2022 and 2023.
Humana Plan Highlights:
Network is the same network as Aetna
Medical and Rx Benefits Match
Silver Sneakers - Fitness Program included (Enhancement over Aetna)
Home Delivery Meal Program - 14 days after in-patient stay
Go 365 Wellness Program included
Post-Discharge Personal Home Care
The City recommends moving to Humana for the Post-65 retiree health plan on January 1, 2022.
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 an Agreement with Humana to Administer a Medicare Advantage Plan for Medicare Eligible Retirees for the Period of January 1, 2022 through December 31, 2022.
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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 Humana for administration of a Medicare Advantage Plan for Medicare eligible retirees; and
WHEREAS, the 2022 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 Humana for the period of January 1, 2022 through December 31, 2022.