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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Human Resources Director
DATE: September 7, 2017
SUBJECT:
A Resolution Authorizing an Agreement with Aetna to Administer a Medicare Advantage Plan for Medicare Eligible Retirees for the Period of January 1, 2018 through December 31, 2018.
PURPOSE:
To authorize an agreement with Aetna to administer a Medicare Advantage Plan for Medicare eligible retirees.
BACKGROUND:
The city currently provides a self-funded insurance plans for pre-Medicare and Medicare eligible retirees through CIGNA. Using the city's health insurance consultant and their data analytic services, it has been determined that the main cost driver to the self-funded insurance plans is the pre-Medicare retiree group. The projected deficit in 2018 for the pre-Medicare retiree's group plan cost is approximately $2,529,131.00. This deficit is currently being subsidized by the active employees and Medicare eligible retirees. As a result, the city decided to explore separate plans for the retirees.
DISCUSSION:
The city did an RFI and received proposals from Aetna, Blue Cross Blue Shield of Illinois, CIGNA, Humana and United Healthcare. CIGNA did not provide a proposal. Currently, there are no alternatives for the pre-Medicare retiree population, however, there are options for the Medicare retiree population through Medicare Advantage Programs. After thoroughly assessing the proposals submitted, we are recommending the approval of Aetna as the provider for the city's Medicare eligible retirees.
Aetna offers the same benefits that the city's retirees currently have under their present CIGNA coverage with added enhancements. There will be no reduction of benefits. It is estimated that the city will save $2,059,431.00 by moving to the Aetna Medicare Advantage Plan.
IMPACT STATEMENT:
No impact
RECOMMENDATIONS:
Place on the Finance Committee calendar for approval to the City Council.
cc: Alderman O'Connor, Chairman
Alderman Mesiacos
Al...
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