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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Director of Human Resources
DATE: August 21, 2019
SUBJECT:
A Resolution Authorizing Blue Cross Blue Shield Blue Advantage HMO (BCBS) for Group Health Care Services for the period of January 1, 2020 through December 31, 2020.
PURPOSE:
To establish the 2020 rates for BCBS Blue Advantage HMO medical insurance.
BACKGROUND:
The City of Aurora provides a fully insured HMO for active employees through BCBS Blue Advantage HMO (BCBS does not allow retirees to remain on the HMO). Renewal rates are set by BCBS and the required premium is based on the sum total of projected new paid claims, physician service fees, pooling charge, risk and administration as determined by BCBS.
The City received 2019 renewal rates equaling a 3.2% decrease over 2018 rates.
DISCUSSION:
The City evaluated Aetna, Blue Cross Blue Shield of Illinois, CIGNA, and United Healthcare in the Spring/Summer of 2019 for the 2020 plan year. Aetna and UHC have comparable HMO networks. CIGNA launched a new HMO product as of April 1, 2019 with pricing favorable versus BCBS; yet CIGNA is still in negotiations with Advocate/Dreyer to join the HMO network. Dreyer is the largest HMO provider for the City of Aurora employees thus until they join CIGNA's HMO this is not a viable option. The City was able to achieve the following as a result of this process:
BCBS initial HMO renewal was 14.1% increase however after further negotiations, the renewal increase has been reduced to 9.9%. In addition, the city will receive $25,000 to put towards wellness initiatives.
Attached are the 2020 rates.
IMPACT STATEMENT:
No Impact
RECOMMENDATIONS:
Place on the Finance Committee calendar for approval to City Council.
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Establishing Blue Cross Blue Shield Advantage HMO (BCBS) for Group Health Care Services for the period of January 1, 202...
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