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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Chief Human Resources Officer
DATE: 8/02/2023
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, 2024 through December 31, 2024.
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, One Guide, 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 2023 was $42.38.
DISCUSSION:
CIGNA's administration fee for Medical/Dental/Vision is increasing 3%. Claims year to date through June have been running at projections for the pre-65 Retirees, the Active OAP, and Value HSA. Claims utilization typically increase the 2nd half of the plan year below medical inflation of 7.5%. The Human Resources team was successful in negotiating the following additionally renewal concessions from CIGNA:
Individual Stop Loss insurance renewal is increasing 13.8% reduce from an initial 19% increase resulting in $80,000 reduction.
Rx Net Cost (with Rebates) are improving approximately $293,000
Wellness Fund is remaining at $40,000
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. ______...
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