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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Director of Human Resources
DATE: August 21, 2020
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, Vision, C.O.B.R.A. and Stop Loss Plan Administration for period January 1, 2021 through December 31, 2021.
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, vision coverage, 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, vision, 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 2020 was $31.44.
DISCUSSION:
CIGNA's administration fee for medical/dental/vision is increasing 2% and the stop loss is increasing 12%. CIGNA is applying a $7,062 administration credit and $67,619 stop loss credit in 2020 to fully offset the increase in rates in 2021. New for 2021 is an Enhanced Care Management program projecting an estimated claim decrease of $180,000. The additional administrative fee of $1.10 PEPM for the Enhanced Care in 2021 is being offset by a $9,451 credit in 2020.
Additional cost savings/incentives include:
Rx Specialty Coupon Program projected savings of $180,000
Rx Rebates are increasing approximately $30,000
Wellness Fund increase from $20,000 to $30,000
$10,000 Communication Fund
$10,000 Discretionary Fee Credit
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 Co...
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