TO: Mayor and Commissioners
FROM: Duane D'Andrea, Human Resources Director
THROUGH: Terrence R. Moore, ICMA-CM
DATE: September 13, 2021
Title
AWARDING AGREEMENTS FOR GROUP HEALTH, VISION, LIFE INSURANCE
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Recommended Action:
Recommendation
Motion to allow the City Manager to enter into and execute a three (3) year agreement with CIGNA to provide the City’s group health plan; a four (4) year agreement with EyeMed to provide the City’s group vision plan; and a two (2) year agreement with The Standard to provide the City’s group life insurance benefit.
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Background:
The City’s current agreement with UnitedHealthcare for the group medical plan, the current agreement with EyeMed for the group vision plan and the current agreement with The Standard for group life insurance will expire on September 30, 2021. Therefore, the City’s consultant, Gehring Group, was instructed to issue an RFP for these plans. As a result of the RFP review, Gehring Group, has recommended the City change its current medical plan carrier from UnitedHealthcare to CIGNA, upgrade its vision plan with EyeMed and renew its group life insurance with The Standard.
Medical Plan - Change from UnitedHealthcare to CIGNA
This recommended change in the City’s medical plan carrier will provide the City with a 5.7% decrease in the projected medical plan costs for the 2021/2022 plan year. These savings are comprised of:
· A reduction in Administrative Services Only (ASO) fees of 12.1% with a three-year rate guarantee and a 2% increase in years 4 and 5.
· A reduction in the Individual Stop Loss premium of 7.1%.
· A reduction in the Aggregate Stop Loss premium of 2.0%.
· A reduction in total claims cost from a UnitedHealthcare’s projected $10,412,309 to CIGNA’s projected $10,250,565. This reduction in costs is based on CIGNA’s claim repricing centered on CIGNA’s negotiated fees with providers.
· CIGNA’s estimated pharmacy rebates of $457,240 versus UnitedHealthcare’s estimated pharmacy reb...
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