TO: Mayor and Commissioners
FROM: Duane D'Andrea, Human Resources Director
THROUGH: Terrence R. Moore, ICMA-CM
DATE: September 16, 2024
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AWARD TWO-YEAR RENEWAL AGREEMENT TO ENROLL GROUP MEDICAL INSURANCE CONTRACT FROM CIGNA HEALTH AND LIFE INSURANCE COMPANY WITH AN ESTIMATED ADMINISTRATION COST $658,190, ESTIMATED STOP LOSS INSURANCE COST $2,795,816, AND ESTIMATED CLAIMS COST $31,872,575 FOR APPROX TOTAL $35,326,581.
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Recommended Action:
Recommendation
Motion to allow the City to enter into and execute a two (2) year renewal agreement with CIGNA to provide the City’s group health plan(s), administrative fees, stop loss coverage, and pharmacy benefit manager.
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Background:
The City signed a three (3) year contract with the option to extend for two (2) additional years with CIGNA for the group medical plan effective October 1, 2021 through September 30, 2024. The City’s current agreement with CIGNA will expire on September 30, 2024, therefore, staff recommends extending the current agreement with CIGNA for a two (2) year renewal period.
Medical Plan - Retain CIGNA as Medical TPA
Recommend the City retains CIGNA as medical plan carrier will provide the City continuity of care as well as increased pharmacy rebates. The contract highlights are shown below:
· Administrative Services Only (ASO) fees will increase by 2% on year 4 of the contract and 2% on year 5 of the contract.
· An increase in the Individual Stop Loss premium of 10%.
· No increase in the Aggregate Stop Loss premium.
· A 68.9% increase (to the city’s benefit) in CIGNA’s estimated pharmacy rebates of $1,203,622 versus CIGNA’s current pharmacy rebates program of $712,444, resulting in an increase of $491,178 in pharmacy rebate for the upcoming plan year.
· Continuation of $100,000 in Wellness funds annually for employee wellness program
· Retain Full-time onsite Wellness Coordinator providing the City with expertise in wellness programs and their implementation.
· Healthcare cl...
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