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TO: Mayor Thomas J. Weisner
FROM: Alisia Lewis, Director of Human Resources
DATE: October 9, 2015
SUBJECT:
A Resolution Authorizing Agreement for Administrative Services with Cigna Health and Life Insurance Company (Cigna) for PPO Group Health, Dental, C.O.B.R.A. and Stop Loss Plan Administration for Period January 1, 2016 through December 31, 2018
PURPOSE:
To authorize an agreement for third-party administrative services (TPA) with Cigna for the City's PPO health insurance plan, dental insurance, prescription benefits management (PBM), C.O.B.R.A and stop loss insurance coverage.
BACKGROUND:
Allied Benefit Systems has been the City's third -party administrator for the City's PPO health plan, Section 125 Flex Plan, Medicare Part D and COBRA administration for PPO participant employees, retirees and their dependents since 2006. In years that followed, the City also utilized providers associated with Allied to provide PBM, dental and stop loss insurance. Currently, BlueCross BlueShield administers the city's dental plan. Last year the city implemented a high deductible health plan (HDHP) administered by Allied. In light of rising insurance costs and the upcoming Affordable Health Care (ACA) Cadillac Tax, which will tax employers on plans that are considered overly rich in benefits and exceed the established financial thresholds, the city procured the services of Group Alternatives, an independent consultant to implement and oversee a competitive bid process for insurance services. They also evaluated both the city's insurance plans and responses received from bidders for current market value and industry best practices. The process included soliciting bids from carriers that offered a comprehensive package that could administer both the city's PPO and HMO requirements.
DISCUSSION:
In assessing all the variables included in the bid processes, we are recommending changing the TPA to Cigna for the administration of PPO, HDHP, dental, P...
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