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TO: Mayor Richard C. Irvin
FROM: Alisia Lewis, Director of Human Resources
DATE: August 17, 2017
SUBJECT:
A Resolution Establishing Cigna Open Access Plan (OAP) and High Deductible Health Plan (HDHP) Health Insurance Plans and Rates Effective January 1, 2018 through December 31, 2018
PURPOSE:
To affirm the 2018 OAP and HDHP schedule of benefits and establish the 2018 insurance premium rates of the city's OAP and HDHP medical insurance.
BACKGROUND:
Each year the city establishes base premium rates for its self-insured OAP and HDHP plans. CIGNA has been the city's health insurance administrator for the OAP and HDHP plans since 2016. Using the city's insurance consultant (Group Alternatives) data analytic service, the city analyzed the main cost drivers to the self-funded plans. The data encouraged the city to offer free bio-metric screenings to participating members in October 2016 to improve members' health and well-being and lower overall health insurance costs. The city plans on offering continued screenings in 2018. Last year in addition to the screenings, the city made certain plan designs changes which further reduced overall cost.
DISCUSSION:
2017 costs are projected to be 3% below 2016 costs however, the city's cost per employee per year of $19,175 compared to 2016 benchmarks of $12,235 for all large employers and $13,342 for government employers, illustrates how costly it is to fund the city's plan. As a self-funded plan, the city is subject to changing cost due to excess or catastrophic medical claims, Rx cost and limitations to making further plan design changes which is subject to ongoing union negotiations. Taking these factors into account and based on the recommendation of the city's consultant, the rates for 2018 have been increased by 5%. There are no plan design changes for 2018.
Attached is the OAP and HDHP Schedule of Benefits
Attached are the 2018 rates
IMPACT STATEMENT:
No impact
RECOMMENDATIONS:
Placed on the ...
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