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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Human Resources Director
DATE: September 7, 2017
SUBJECT:
A Resolution Authorizing an Agreement with Aetna to Administer a Medicare Advantage Plan for Medicare Eligible Retirees for the Period of January 1, 2018 through December 31, 2018.
PURPOSE:
To authorize an agreement with Aetna to administer a Medicare Advantage Plan for Medicare eligible retirees.
BACKGROUND:
The city currently provides a self-funded insurance plans for pre-Medicare and Medicare eligible retirees through CIGNA. Using the city's health insurance consultant and their data analytic services, it has been determined that the main cost driver to the self-funded insurance plans is the pre-Medicare retiree group. The projected deficit in 2018 for the pre-Medicare retiree's group plan cost is approximately $2,529,131.00. This deficit is currently being subsidized by the active employees and Medicare eligible retirees. As a result, the city decided to explore separate plans for the retirees.
DISCUSSION:
The city did an RFI and received proposals from Aetna, Blue Cross Blue Shield of Illinois, CIGNA, Humana and United Healthcare. CIGNA did not provide a proposal. Currently, there are no alternatives for the pre-Medicare retiree population, however, there are options for the Medicare retiree population through Medicare Advantage Programs. After thoroughly assessing the proposals submitted, we are recommending the approval of Aetna as the provider for the city's Medicare eligible retirees.
Aetna offers the same benefits that the city's retirees currently have under their present CIGNA coverage with added enhancements. There will be no reduction of benefits. It is estimated that the city will save $2,059,431.00 by moving to the Aetna Medicare Advantage Plan.
IMPACT STATEMENT:
No impact
RECOMMENDATIONS:
Place on the Finance Committee calendar for approval to the City Council.
cc: Alderman O’Connor, Chairman
Alderman Mesiacos
Alderman Bugg
Alderman Mervine, Alternate
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
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A Resolution Authorizing an Agreement with Aetna to Administer a Medicare Advantage Plan for Medicare Eligible Retirees for the Period of January 1, 2018 through December 31, 2018.
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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 elible retirees; and
WHEREAS, the 2018 proposed City budget provides for this item in employee health account 602-0000-410.28-02; 602-000-410.28-04; 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 is hereby authorized to enter into an agreement with Aetna for the period of January 1, 2018 through December 31, 2018.