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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Chief Human Resources Officer
DATE: August 16, 2021
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, 2022 through December 31, 2022.
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 2021 was $36.74.
DISCUSSION:
CIGNA's administration fee for Medical/Dental/Vision is increasing 1.9%. Claims are trending significantly higher for the pre-65 Retirees, while the Active OAP population is trending at the rate of medical inflation and the HDHP remains flat.
Additionally:
PPO discount improving by 9.9%
Claim and Clinical guarantees equal to $300,000
Rx Net Cost (with Rebates) are improving approximately $165,000
Wellness Fund increase from $30,000 to $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. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing Agreement for Administrative Services with Cigna Health and Life Insurance Company (Cigna) for PPO and Value HSA(HDHP) Group Heal...
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