HomeMy WebLinkAbout2015-11-23 16-024 ORDERCOUNCIL ACTION
Item No. 16-0 24
Date: November 23, 2015
Item/Subject: ORDER, Authorizing Execution of Contract for Group Health Insurance
Program with Cigna
Responsible Department: Executive
Commentary: On October 21, 2015 the City received five responses to its Request for Proposals
(RFP) — Group Health Insurance Program. The overall total annual cost submitted for the group
health insurance program beginning January 1, 2016 for active employees ranged from $6,890,977
to $8,396,163, with the lowest premium being submitted by Cigna.
The City's current contract with Cigna contains a shared returns provision, in that when the City's
utilization (claims paid) of health insurance is below estimated costs, the savings are available to the
City through an established premium stabilization reserve (PSR) fund. Conversely, if health
insurance costs are higher than the billed premium, the excess costs are subtracted from the
balance of the PSR fund. While increasing health insurance premiums based on past utilization is
the norm in the health insurance industry, allowing the City to utilize savings realized in good years
to reduce future premiums is very beneficial provision. The Cigna 2 submission with an overall rate
reduction of 7% is based on the use of approximately $308,000 of anticipated calendar year 2015
shared returns/savings.
The results of the RFP were reviewed with the City's Health Insurance Advisory Committee which is
comprised of City wide departmental staff (union and non-union) and retirees, as well as the City's
independent health insurance consultant. This item was reviewed and recommended for approval by
the Finance Committee on November 16, 2015.
This item comes forward for Council action, as the contract award is over $100,000.
Manager's Comments:
Associated Information:
Budget Approval:
Legal Approval:
Introduced for
X Passage
First Reading
Referral
Department Head
City Manager
Finance Director
Page , of
Solicitor
16-024
NOVEMBER 23, 2015
Assigned to Councilor Durgin
CI'T'Y OF BANGOR
(TITLE.) Order, ORDER, Authorizing Execution of Contract for Group Health
Insurance Program with Cigna
By tfie City Council of the Oty of Bangor:
ORDERED,
THAT, Deborah Cyr, Finance Director is hereby authorized to execute a contract
with Cigna for the City's Group Health Insurance Program.
IN CITY COUNCIL
NOVEMBER 23, 2015
MOTION MADE AND SECONDED FOR PASSAGE
PASSED
CITY CLERK