HomeMy WebLinkAbout2007-11-26 08-032 ORDERACTION
_
Item No,
08
V2
1.17aBfCIn!V1
Item/SubJegt: ORDER, Authorizing the City Manager M Provide Notice of Contract
Termination to Anthem Blue Cross Blue Shield of Maine Effective December 31,
2om
Responsible Department: Exeofive
Commentary:
Following an extraordinarily large increase in group health insurance premiums effective July 1',
a City-wide Health Insurance Advisory Committee was established and an Intemlve review
process was undertaken to solict interest from other group health care providers. At the end of
a five-month process, Me Advisory Committee ovenvhelmbgfy endorsed a proposal from CIGNA
HealthCare to bemire the City's health insurance provider effective January 1, 2008. A
subsequent vote by all 21 stakeholder groups covered by Me avis health plan affirmed this
declsiori by a vote of 19-2. Further discussions with both groups who Initially apposed this
change have resulted in understandings that allow Me City to proceed.
This Order will authorize the City Manager to provide the required thirty -day notice to Anthem
Blue Cross Blue Shield of the City's intent to terminate the existing contract between the parties.
A companion Order will authorize the Cry Manager to formally engage CIGNA HealihCare as the
City's new group health care provider effective January 1, 2008.
Department Hod
Manager's Commenf�s:f1su.imm�end approval.
�� ' `� � "J'•, Clry Manager
Associated Information: Order, Information Package
Budget Approval:
Finance Director
Legal Approval:
CIN Solidtor
x Passage
_ First Pleading Page _ of _
Referral
08 032
c1s�
Assigned! to councilor Palmer Bweober 26. Tao]
x CITY OF BANGOR
m1e: ORDER, Authorizing the City Manager to Provide Notice of Contact Termination
to Anthem Blue Cross Blue Shield of Maine Effective December 31, 2007
WHEREAS, the City of Bangor's group health insurance coverage is provided by Anthem Blue
Cross Blue Shield of Maine; and
WHEREAS, following a 49.09% race increase effectWe July 1, 2007, a CRywide Health
Insurance Advisory Committee was created and an intensive review process was
undertaken to solicit interest from other group health care providers; and
WHEREAS, at the completion of the review process, the Advisory Committee voted 17-4 to
recommend that the City move to CIGNA HealthCare effective January 1, 2008; and
WHEREAS, following that vote, each of the 21 union, nonunion, and retiree stakeholder
groups conducted votes to fuller determine interest levels, with the initial vote
resulting In 191n favor and 2 opposed; and
WHEREAS, additional discussion with the two groups opposed has reacted in an understanding
that will allow the move to CIGNA HealthCare to proceed.
NOW, THEREFORE, BE lT ORDERED THAT
the City Manager is hereby authorized to provide the required 30 -day notice of ombract
termination to Anthem Blue Crass Blue Shield of Maine effective December 31, 2007; and
BE IT FURTHER ORDERED THAT
the City Manager is autlmrized to take any other necessary action that may be required to
effectuate the Implementation of this Order.
ID CIn CODPCII....
Poaevbhe/ 326, M07
Peen J/Fp 08-032
_%]C11tY mm ORDER
( Ed nuthoriaine the city Reneger to
Emeide Notice of Contract Eeruinatiou
Cmxx Blue Shield of Maim
Effective Decenher31. 2000
Ami alto Cowtlbr e
I
f
A 02
MEMORANDUM
To: Finance Committee
From: Robert W. Farrar, Assistant City Manager/Human Resources Director
Su: Group Health Insurance Program
Date: November 16, 2007
Over the past five months, a collaborative effort has been underway regarding
the future of the City's group health insurance program. This effort was
precipitated by an extraordinary 49.09% increase in group health Insurance
premiums that became effective on Jury 1". A committed group of stakeholders
representing all union and non-union departments, management, labor and
retirees, with the assistance of the City's independent health Insurance
consultant, engaged In a thorough review process that yielded a series of
recommendations Including changing health insurance providers effective
January 1, 2008.
As detailed in the attached report, the Health Insurance Advisory Committee
endorsed the CIGNA HealthCare proposal by a vote of 174. The Committee
noted the following areas of strength in the CIGNA proposal: (1) substantial
comparability in plans offered; (2) an approximate premiurp savings of 10%,
$$650,000 in the first year; (3) a comprehensive network of participating
hospitals, doctors and specialists; (4) a significant presence In Maine; and (5) a
strong commitment to preventative health care and wellness initiatives.
Following the Committee vote and completion of Its report, an extensive series of
Informational meetings were held City-wide to explain the Committee's
recommendation and CIGNA proposal to all stakeholders. Once completed, each
of the 21 stakeholder groups (30 non-union, 10 union, and 1 retiree group) were
asked to formally endorse or reject the Advisory Committee's recommendation to
move to CIGNA. The result of this voting process was 19 groups In favor and 2
groups opposed. Since that time, we have met with both opposing groups
(Public Works Union and Bass Park employees), and I am pleased to report that
an understanding has been reached with each group that will allow this process
to move forward. Additionally, an In-depth reference check was conducted by
the Assistant City Manager, which Included such current CIGNA customers as
Lincoln Tissue and Paper, Eastern Maine Healthcare Systems, Cianbro
Corporation, Bath Iron Works, Fairchild Semi -Conductor Corporation and the City
of Manchester, NH. The references were uniformly positive and a summary of
the comments received is attached.
"8 032
At this time, with wrimmence from all stakeholder groups, and a
recommendation from the Health Insurance Advisory Committee, we are
requesting the Finance Committee to support the following actions:
1. Authorizing the City Manager to formally notify Anthem Blue Cross
Blue Shield of Maine that the City of Bangor will be terminating Its
contract with Anthem effective December 31, 2007 (a thirty -day notice
Is required); and
2. Authorizing the City Manager to take any necessary action to formally
engage CIGNA HealthCare as the new group health care program
provider effective January 1, 2008.
Should the Finance Committee approve the above recommendations, two Council
Orders will be prepared and Included on the November 2e City Council agenda
for Council consideration and passage.
At Monday's meeting, City staff will be prepared to review this entire effort and
answer questions. Kim Crossman, the City's Health Insurance Consultant will be
present along with Jim Higgins, Vice President of Sales and Account Management
for CIGNA's operations in Maine. Additionally, members of the Health Insurance
Advisory Committee and other Interested parties have been ratified of the
meeting and invited to attend.
We look forward to discussing this important issue with you Monday. Should you
have any questions in the meantime, please feel free to contact me at your
convenience.
RWF/jdr-t
Cc: Kim Crossman (w/o attachments)
Jim Higgins (w/o attachments)
Attachnn
1. Report and recommendations of the Health Insurance Advisory
Committee including projected financial savings summary and
projected premium cost sharing rates
2. Question and answer document
3. Anthem -CIGNA Comparison of Benefits Summaries (5)
4. Summary of reference inquldes
� e,
j� 032
October 1, 2007
Interim Report
Summarizing
the Work and Recommendations
of the
City of Bangor
Health Insurance Advisory Committee
Introduction
For the past four months, an enthusiastic and collaborative effort has been
underway regarding the future of the City of Bangor's group health insurance
Program. The Health Insurance Advisory Committee (HIAC) consists of more
than thirty-five individuals, all of whom have a vested Interest in the City's group
health insurance plan, including most notably, the plan design (benefits), cost
and provider (carrier). Those Involved include representatives from all of the
various stakeholders including active non-union and union employee groups as
well as rebrees. Two previous participating groups, Bangor Public Library and
Bangor Housing Authority, left the program effective July Ira and have contracted
with different group health are providers.
The HIAC was Initially formed to analyze and evaluate proposals from other
interested group health are providers. After hearing presentations and detailed
explanations from our current provider Anthem Blue Cross Blue Shield of Maine
and prospective providers Aema, CIGNA, Harvard -Pilgrim and Maine Municipal
Employees Health TnL%the HIAC recommends that the City continue to move
(onward with the CIGNA proposal and to determine whether there Is sufficient
Interest from all stakeholders to change to CIGNA effective January 1, 2008.
Background
The City of Bangor has obtained its group health Insurance coverage from
Anthem and its predecessor, Blue Cross Blue Shield of Maine, for at least the
past thirty-five years. The City plan has included active employees of the City,
Housing Authority and Library, as well as retirees from these three organizations.
The City plan currently insures some 550 participants (employees and regrew)
Providing coverage for approximately 1,000 lives including spouses and
dependents.
The City's health Insurance program consists of three basic plans for active
employees: a Traditional Full Service Plan, an HMO plan (added In 1988) and a
2U
PPO Plan (added in 2004). Two basic plans exist for retirees: A Full Service
Carveout Plan and PPO Calve -out Plan (added in 2007).
The City's plan Is self -rated, that is, it Is rated on its own claims experience. It is
not community rated based upon Anthem's statewide book of business. Years
when our claims experience (loss ratio) Is low, our premium for the following
year is correspondingly low. When our claims experience is high, we suffer with
large premium increases such as this past year. Since 1990, the average yearly
rate Increase has been slightly more than 11%. Excluding last year, the average
Increase was just over 9.0%.
The impetus for establishing the HIAC in the spring of 2007 was the
exceptionally large premium Increase. for July In of 49.09%. Thisratehike
resulted in more than a $2.0 million increase for the overall cost of the group
health Insurance premium. The financial impact to employees, retirees and the
City was enormous. The City and its employees shared In the increased cost,
while the retirees had the burden of assuming the full cost of the premium
Increase. Due to the size and financial impact of the Increase, the City was
forced to change the plan upon which the City/employee cost sharing formula
was based from the Full Service Plan to the PPO Plan. Employees who remained
on the more expensive Full Service and HMO Plans saw Increases in their share
move from 49% to 100% or better. The resulting fallrout from this situation
lead to the inevitable question. from many stakeholders: Can we do better
somewhere else?
Proposal Submission and Review Process
With assistance from the Chy's Independent Health Insurance Consultant, Mr.
Kim Creasman of Benefit Services, Inc., the City and the HIAC quickly began a
process to obtain proposals from the four other group health providers licensed
to conduct business in the State of Maine: Aetna, CIGNA, Harvard -Pilgrim and
Maine Municipal Employees Health Trust. All four organizations were provided
m -depth Information related to the City's existing plans, three years of claims
experience including large claims, and a comprehensive list of current enrollment
numbers by plan and coverage type. As a starting point for comparison
purposes, all respondents were asked to provide proposals that most closely
matched the Oty's existing three plans.
While this effort was getting underway, Anthem was provided an opportunity to
meet with the HIAC in order for the Committee to better understand the
underlying rationale for a large increase, to explore opportunities to reduce the
increase by making charges in the benefit structure and to provide Anthem an
opportunity to consider reducing their 49.09% rate increase downward. In the
end, HIAC members were not interested in considering a reduction of benefits to
U3 022
enrollment numbers and plan coverages. Retirees would enjoy a reduction In
premium costs as well. Both the City and employees would save under the
CIGNA plan, based upon the current cost sharing model currently in place based
upon the PPO Plan as the City's base plan.
A summary of the estimated financial Implications associated with changing plans
and a summary of the projected health insurar cost sharing rates have been
prepared and included as an attachment to this report.
Committee Recommendations
After carefully reviewing each proposal, discussing the merits of each and
evaluating the non -monetary and monetary Implications associated with each
response, the Commitee voted 17-4 in favor of the following set of
recommendations:
1. That as a group, the HNC endorsed the CIGNA proposal for the City's
group health insurance program.
2. That the City move forward expeditiously to formulate a process which
would allow for the consideration of the CIGNA proposal by all of the
participating stakeholders (non-unlon employees, unions, and
retirees).
3. That a decision target date of mid-November be established for
stakeholders to respond with their respective expressions of interest,
with the possibility of a January 1, 2008 conversion date, depending
upon the outcome of #2 above.
4. That City of Bangor decision makers (City Council and City Manager)
be updated as appropriate regarding the results of the work of the
HNC, including these recommendations.
5. That the CIGNA proposal continue to be analyzed, additional reference
checks be performed, and such other due diligence tasks be
undertaken to ensure that the proposal has been evaluated thoroughly
and completely.
Next Steps
Based upon the recommendations outlined above, the next steps in the process
will include the following:
1. Hold Informational meetings with Interested groups of non-union and
union employees as well as retirees. Prepare and distribute sufficient
background Information to enable groups to make Informed decisions
relative to the CIGNA proposal.
El
02 032
lower the increase, and Arnhem did not further adjust the 49.09% Increase.
(Note: Anthem had already adjusted its formula produced Increase of 57.48% to
49.09% for the April renewal meeting with the City). Effective July 10, the City
renewed its group health Insurance program with Anthem for a one-year period,
with a standard thirty day notice provision in the Agreement.
Moving through June and July, the Gry received proposals from all four
prospective proposers. Each of the four responders was invited to meet with
and to make presentations to the HIAC. During this time, considerable staff and
consultant time was spent providing updated and detailed infermatlon to the
respondents regarding claims and census information to assist them In preparing
and refining their cost proposals. (As each new month of claims experience was
developed, the respondents requested to be provided the data in order to
review/update/refine their proposals. Cost projections have been a moving
target given the volatility of the City's overall claims experience and the relative
number of large claims).
Following the completion of the presentations, Mr. Crossman prepared a
summary of the various providers, their proposed plans and projected rates, as
compared to Anthem. After discussion and review, the HIAC voted
overwhelmingly to narrow the field of proposals to remain under consideration
from four to two.
Eliminated in this first round were Aetna and Harvard -Pilgrim. Concerns with
Aetna revolved around their pricing for their PPO Plan, which was significantly
higher than Anthem's current plan. This would have meant additional premium
hikes for the City and participants. Harvard-Pligdm was not carried forward due
to their small regional network of healthcare providers, a required full upfront
referral process for health care services in all product lines, and higher retiree
premiums.
With CIGNA and Maine Municipal Employees Health Trust remaining, the HIAC
focused its attention on these two proposals. With continuing assistance from
Mr. Crossman, further review and analysis of these proposals occurred including
both monetary and con -monetary considerations. Strengths of the CIGNA
proposal include: very comparable plans to ecistlng plans; approximately a 10%
premium savings for the initial year; strong network of providers (hospitals,
doctors, specialists), significant presence In Maine, and flexibility in plans offered.
Weaknesses in the CIGNA proposal include: status as a for-profit organization;
City remains rated on its own experience; limited public sector clients; customer
serAce and claims administration handled out of state.
Regarding financial impacts, the CIGNA proposal is projected to save the City
and its employees approximately $650,000 for the first year, based upon current
G32
2. Update City Manager and City Council (or subcommittee thereof) of
the ongoing process and progress to date, at the appropriate time.
3. Continue to evaluate/analyze CIGNA proposal as appropriate
4. Collect and tabulate expressions of Interest from all stakeholder groups
no later than November 0.
5. Make final decision to accept or reject recommendation of H/AC
regarding moving forward with CIGNA as a new group healthcare
provider. Provide required notice to Anthem depending upon decision
made.
Conclusion
The preceding four month inclusive effort involving all levels and groups within
our organization has resulted in a series of strongly supported recommendations
for consideration. The Committee's work was thorough, thoughtful and well
supported by careful analysis from the City's independent health care consultant.
It Is the Committee's hope that the resulting work product can be relied upon as
a basis for further discussion, consideration and eventual decision making
platform by all involved stakeholders in the City's group health insurance
program.
Finally, the Committee believes that there Is additional work that could be done
In the health insurance arena, including but not limited to: monitoring health
insurance experience trends; evaluating other potential health insurance
products/plans; providing additional educational opportunities to employees;
more fully implementing the concept of wellness and healthy practices into the
workplace. To the credit of those participating, there was significant interest
expressed In continuing with the HIAC to assist in these matters and other
related Issues. Given this strong interest level, continuing the Committee would
certainly appear to be a logical extension and a positive outcome of this recently
completed review process.
Health Insurance Advisory Committee Members:
Sue McPike, Bass Park
Henry D'Angelo, BIA Ramp Union
Ken Eaton, Teamsters Local 340 Business Agent
Polly Godirg, Finance Department
Ran Green, Bangor Firefighters Association President
AI Douglas, Information Services
Renee Wellman, Police Support Union
Tracy Wiilette, Parks and recreation Department
Bud Knickerbocker, Planning Division
]ane Robbins -Teel, City Managers Office
i 14
Jany Morrill, Police Patrol Union
David Little, Tax Collectors Office
Bob Dawes, Fleet Maintenance Division
Jan 7heriault, Code Enforcement Division
Bob Bourgault, IAFF Local 772 Representative
Risteen Masters, BIA
Harry Courtois, Labor Relations Officer
Brian Maddox, Fleet Maintenance Union Representative
Dana Wardwell, Public Works
Helen Stanley, Retired Employee
Chip Hodges, Police Commanding Officers Union
Sylvia Perry, AFSCME Council 93 Representative
Steve Smith, Public Works Union President
Edward McKeon, Redred Employee
John Frawley, Retired Employee
Stan Jackson, BIA Aircraft Mechanics Union
Patti Hamilton, Health and Welfare Department
Terence Spencer, BDA Airfield Maintenance Union
Keefe Cyr, W Wry
Peter Arno, Police Department
Salty Bates, Community and Economic Development Department
Dan McAlister, Public Works Union
Bill McKinley, Union Representative, Maine Association of Police
Jeff Cammack, Fre Department
Smit Paradis, WWIP
Don Libby, BU Dispatchers Union
Venetia Hunt, Police Support Union
Bob Farrar, Assistant City Manager/Human Resources Directpr/Committee
Coordinator
Km Crossman, Benefit Services, Inc., Independent Healthcare Consultant
03 032
GS 332
101112007
City of Bangor
Projected Financial Summary
Group Health Insurance Program
Eetlmared Ci[ wi"First Year Cos[Savings wim crcm Proposal
Em '"ees
CIN
QW -Opo Aon %os -In 100%(AnIM1e HMO)
Fanny, 2 person $34,012
$14,346
Siegle Parent $0,550
$4,644
Single $40,344
$26,902
CIGNA - Open Attea Nus %% (And, MI Servke)
Rangy, 2 Nman $13,834
$W,172
3ngm Parent $0
$0
Simla $20,934
$29,006
CIGNA - Opel ACC65 Plus- 90%(AnMem PN)
Fam0y, 2 nenan $01996
$192,988
Snga Parent $101688
$37544
Singk M466
$651666
TPlal $216,OA
$436,549
'MOTE: There are anen0y no parkarants In dais plan
a ne, 032
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08 032'
October 19, 2007
City of Bangor
Group Health Insurance Program
Consideration of CIGNA Healthcare as New Health Insurance Provider
Frequently Asked Questions
1. Q: Who is CIGNA Healthcare?
A: CIGNA was formed in 1982 through the combination of Connecticut
General Corporation and INA Corporation, both of which were
established in the 1800's. They are a publicly traded company listed on
the New York Stock Exchange (Symbol CI) providing health, life, dental,
disability, acddent and vision insurance plans for groups and individuals.
CIGNA is a worldwide corporation with 2006 revenues of $16.5 billion
and net income of $1.2 billion. They employ 27,100 employees in 28
countries Including 134 offices in 98 U.S. cities. Currently, 9.4 million
participants are insured throughout the United States. CIGNA can be
accessed online at www cignz com for additional background
information. -
2. Q: Closer to home, who do they Insure in Maine or in our region?
A: CIGNA currently insures some 68,201 members in Maine. Organizations
with employees covered by CIGNA Include Bath Iron Works, Cianbro
Corporation, Eastern Maine Medical Center, Eliot Hospital Systems,
Fairchild Semiconductor and Lincoln Pulp and Paper. Regionally, CIGNA
insures the City Of Manchester, N.H., state employees In Vermont, New
Hampshire Motor Transport Association and Papa Gres, Inc., among
others.
3. Q: Why was CIGNA recommended over other healthcare?
providers?
A: After months of careful review, evaluation and interviews, the Health
Insurance Advisory Committee strongly recommended the CIGNA
proposal over Anthem and three other proposals (AETNA, Harvard -
Pilgrim, and Maine Municipal Employees Health T1mst) fur six reasons:
• The ability to offer very comparable plans to the anent
Anthem plans for employees and retirees
• A comprehenslve and extensive network of providers (doctors,
hospitals, and specialists) in Maine and nationwide
• An approximate premium savings amount of 10% for the Initial
year, compared to current premium rates in place with Anthem
• CIGNA's significant presence of insured customers in Maine and
the region.
• A strong commitment to, support of, and involvement with
employee wellness initiatives and programs
• Flexibility in plan design and benefit offerings
�)
08 032
4. Q: Are there any downsides associated with accepting the
CIGNA proposal?
A: The Advisory Committee identified several possible concerns with
CIGNA's proposal:
• CIGNA is a for-profit organization, similar to Anthem
• The CINs group healthcare plan will continue to be rated
on its own experience, which contributes to the potential
for rate volatility
• Customer Service and claims administration are based out-
of-state
• If the City leaves Anthem, we will lose our grandfathered
status for the current Full Service and HMO plans. That
means that if we were to return to Anthem in the future,
those plans would not be available
S. Q. What Is the current composition of the participants In the
City's group health Insurance program?
A. Our group currently consists of 422 active employee contracts and
125 retiree contracts totaling 547 participants. When spouses and
dependents are counted, there are approximately 1,000 insured lives
in our group. Effective July 1°, both the Bangor Housing Authority
and Bangor Public Library left our group and contracted with new
healthcare providers as a result of the large rate increase.
6. Q: While the premiums are lower, how do the health insurance
benefits compare?
A: The Health Insurance Advisory Committee and the City s Independent
health Insurance consultant spent considerable time and effort
working with CIGNA in an attempt to duplicate Anthem's existing
plans as closely as possible. As you might expect, it was not possible
to duplicate the plans exactly. However, while individual benefit lines
may be different, taken as a whole, CIGNA's plans are substantially
comparable. Each participant Is encouraged to review the summary
comparison sheets in your information packet to reach an Individual
determination of whether Anthem or CIGNA benefits may be more
advantageous for your particular health insurance needs.
7. Q: If CIGNA is selected, is the City's intent to continue with the
current cost sharing formula which is presently based upon the
Anthem PPO Plan?
A: Yes. The current cost sharing formula using the Anthem PPO Plan as
the City's standard base plan covers 81.5% of our active participants
—all non-union employees and five unions with whom the City has
reached agreement. The City proposes to continue the current
practice of paying 75% of the Family Plan cost, 77.5% of the Single
Parent Plan cost, and 80% of the Single Plan cost of the comparable
CIGNA Plan (the Open Access Plus 90%), if a conversion to CIGNA
9lf
Ja 032
occurs. (Retirees pay 100% of selected coverage). As is current
practice, employees who wish to buy -up to the more expensive plans
— CIGNA Open Access Plus 80% and Open Access Plus 100%- may
choose to do so at their additional cost
8. Q: If CIGNA is selected, will there be a complete open enrollment
Process?
A: Yes. All current participants will have an opportunity during this open
enrollment period to select from among the various plans CIGNA
offers. Present employees will not be "restricted" to selecting only the
standard abase pian" (CIGNA Open Access Plus 90%) during this
initial open enrollment process, Future newly hired employees may
be restricted to the qty's "base plan," CIGNA's Open Aaess Plus 90%
Plan (equivalent to the Anthem Blue Choice PPO Plan).
9. Q: Are there any pre-existing condition limitations associated
with the potential change to CIGNA?
A: In summary, for all current employees and retirees who are covered
by Anthem, there are no pre-existing condition limitations. Similar to
the Anthem plan, the pre-existing condition limitation will only apply
to employees joining the plan who have not been covered under a
Previous medical plan for 63 days or more. For further information,
CIGNA has an enrollment notice which can be provided upon request
10. Q: How does the CIGNA Network of Providers compare with
Anthem?
A: Each company has its own established network of doctors, specialists,
and hospitals who have agreed to fixed prices for services as a cost
containment measure. CIGNA's Network of Providers is extensive and
nationwide. We have compared CIGNA's local provider networks to
Anthem's and have found both to be very similar. Additionally, we
have done spot checking of out of state provider networks and again
found that CIGNA and Anthem are very comparable. This is not to
say that every Anthem in -network provider Is also an in -network
CIGNA Provider, but W date, based upon our review and Independent
review by several interested employees and retirees, the networks all
appear to be very similar.
11. Q. What is the timeframe for decision making regarding CIGNA's
proposal?
A: The decision to move to CIGNA or remain with Anthem must be made
no later than mid-November. CIGNA's proposal and rate structure is
only valid until January 1s for the following twelve month period.
However, CIGNA will need at least 45 days to conduct employee
orientation meetings, accept and process new enrollment forms for all
employees and retirees, prepare certificates of coverage for all
participants, create and distribute new CIGNA Insurance identification
cards and related start-up tasks. Accordingly, in order for a January
GS 082
1" conversion to occur, goal decisions will need to be in place by mid-
November to allow for an orderly transition.
12. Q. What are the next steps In the decision making process?
A: All stakeholder groups will have an opportunity to express their views
on the Health Insurance Advisory Committee's recommendation to
change to CIGNA effective January 1, 2008. Our non -unionized
employees will be divided into 10 groups and will vote by group on
whether they agree with the Advisory Committee's recommendation.
Our unionized employees will work through their respective unions (10
in total) and will vote on whether they agree with the Advisory
Committee's recommendation. Retirees will also vote on whether
they agree with the Advisory Committee's recommendation. Thus, in
total, there will be 21 votes representing all stakeholders. And,
0nally, the Bangor City Council win need to evaluate and consider the
group votes and the Advisory Committee's recommendation.
13. Q. Could another health care provider (other than Anthem) be
considered if a decision is made not to move forward with
CIGNA on January 1a0?
A: Not at this time. Given the complexity of the proposal process, the
short -lime frame for which proposers were willing to guarantee their
health insurance rates, the stakeholder review process, and City
Council decision making process, there Is not sufficient time to
consider another provider if the CIGNA proposal is not accepted. If
the decision is made not to proceed with CIGNA, then the City will
remain with Anthem until such time as another comprehensive
review/proposal process is Initiated.
14. Q: If I have further questions after reading this information and
the health insurance information packets or attending
employee meetings, who may I contact?
A: Bob Farrar, Assistant Coy Manager and Human Resources Director, can
be contacted by telephone at 992-4202, or by a -mall at
nothert.farran0bargormaine.cov or by stopping by his office on the 3"
poor of City Hall.
GS 032
To: Group Health Care Participants
From: Robert W. Farrar, Assistant City Manager/Human Resources
Director
Subject: CIGNA References
Date: October 31, 2007
As an Important part of our continuing review of CIGNA's proposal to provide
group healthcare coverage to the City, I have recently completed a series of
reference checks with other organizations using CIGNA. Those contacted
include: Bath Iron Works, Nncoln Tissue and Paper Company, Fairchild Semi -
Conductor Corporation, City of Manchester, New Hampshire, Eastem Maine
HealthCare Systems and Clanbro Corporation. Some of these organizations were
CIGNA provided references, others were contacted independently. In each
organization, I spoke with either the Human Resources Manager or Employee
Benefits Coordinator, all of whom had direct knowledge of CIGNA's performance,
as well as both employee and employer satisfaction levels with CIGNA
Healthcare.
Based upon these reference checks, I am able to report that both the employers'
and employees' satisfaction level with CIGNA Is high and their performance has
been very good. The following is a sampling of comments received about
CIGNA:
➢ They have been very responsive to our employees.
• They deliver and perform as they say they will
➢ We will stay with them as long as possible.
D We have gone out to bid four of the past five years, and CIGNA has been
the best proposal each time.
➢ They are Wremely committed to prevention and wellness programs. They
are very pro-acHve in these areas.
D We recently left Anthem and are very happy with CIGNA.
➢ We appreciate the service provided by CIGNA.
D They were very responsive to our needs during the enrollment process.
➢ CIGNA worked closely with us on the renewal following year one, as they
said they would. They treated us fairly.
➢ They are more progressive, contemporary and RerJble than our previous
provider.
➢ We just completed a revlew of seven healthcare proposals, CIGNA was
tops.
➢ They have been very helpful and accommodating to employees and
responsive to company leaders.
n We have had no problems; CIGNA never says we can't do that.
➢ They are careful paying claims, for the benefit of the entire group.
D CIGNA was very good during our transition to them.
U8 032
➢ We receive very few complaints from employees about them.
D They were fair during the renewal process in proposing the new rates.
D Very helpful with our wellness plan, directly involved.
➢ We have thousands of employees worldwide, and we are very satisfied.
D Their administration fees are lower than their competitors based upon our
analysis.
• The claims and administrative services provided from their Pennsylvania
based headquarters Is very good.
➢ It was an initial adjustment to leave our old provider and move to CIGNA
but we are happy now.
D As expected, there were some initial start-up Issues during the first
quarter, but everything settled down as we moved into the second
quarter.
D Some claims get rejected initially due to improper coding by providers
(doctors, hospitals, specialists), but once correct coding is applied, the
bills are paid.
• With 10,000 Insured lives, we talk with them 3-5 times per day. They
provide very good service and short turn around time for answers to our
questions.
D Their formulary lists (which drugs fit Into the various ca -pay categorles)
are slightly different from Anthem, which took a little adjusting.
D Their network of doctors, hospitals and specialists Is very good.
➢ Majority of claims go through easily, there have been a few Issues due to
our plan design and having providers understand coding/submisslon
requirements .
➢ Have looked at other insurers in Maine, CIGNA Is the best In our opinion.
D Accurate In claims handling and the premium setting process.
D Wellness program has been very helpful; It has reduced claims for past
two years.
➢ We would not be using a provider who was performing poorly.
➢ It is critical for our company to have a good Ieefthrare provider/partner
and we are very satisfied with CIGNA.
n They have made a strong commitment to wellness and prevention and
have performed as promised.
D Having daims/customer service in Scranton, PA has not been a problem.
D We have had a few Issues with them, but we did with previous providers
as well.
D We have no reservations about recommending CIGNA to other
orgartMons.
D We had Anthem for many, many years and were nervous about changing
to CIGNA, but has worked out very well and we have not looked back.
In summary, the vast number of comments from the six organizations surveyed
were very positive. Several had recently switched from Anthem (due to pricing
2 3g
^0 032
concems) and although initially skeptical, had found their experience with CIGNA
to be favorable. Two areas of concern centered around paying Balms due to
Improper coding from frontline providers and the drug list for co -pays being
somewhat different from Anthem. Noone commented that they wished that
they had not switched to CIGNA or wanted to leave them.
Taken as a whole, I was encouraged with the number of favorable comments
received, and the wide variety of areas in which CIGNA was performing well.
I hope that this Information is helpful and useful down the decision making
Process.
3
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