Title
A Resolution Of The City Commission Of The City Of Hollywood, Florida, Authorizing The Appropriate City Officials To Execute A Five-Year Agreement With Cigna For Medical and Prescription Drug Administration In An Annual Amount Not To Exceed $915,385.90.
Strategic Plan Focus
Employee Development & Empowerment
Body
Staff Recommends: Approval of the attached Resolution.
Explanation:
The City’s current medical and prescription drug administrator is Cigna and the contract will expire on December 31, 2021. The City’s benefits consultant, the Gehring Group, issued a Request for Proposal on April 23, 2021 seeking proposals for medical and prescription drug administration. Aetna, AvMed, Cigna, Humana and United Healthcare provided proposals for medical and prescription drug administrative services. Humana was disqualified due to network service area deficiencies. Both Cigna and United Healthcare proposed a bundled program of medical administration, pharmacy benefit management, and integrated stop loss insurance. When analyzing this line of coverage, many factors are compared including plan design, fixed costs, claims expenditures, prescription rebates, provider network access, prescription formulary disruption and other available funds. While both proposed plan designs are very similar with minimal differences, Cigna’s provider network is at a 98.3% match and United HealthCare’s is at a 96.4% match. United HealthCare’s prescription formulary would result in 2.2% of scripts going into a more expensive formulary and 3.3% of scripts would be totally excluded. Cigna is proposing to provide a total of $2,925,000 additional funds to be used towards the medical plan during the life of the contract and United HealthCare only proposed an additional $1,813,240. Cigna’s proposed additional funds includes $150,000.00 in wellness funds, $70,000.00 in technology funds, $5,000.00 for COBRA administration, $100,000.00 for on-site representation services for each year of the five-year contract and up to $1,300,000.00 in discretionary funding for entire length of the contract. Cigna proposed a 6.6% reduction in medical administration service fees from the previous contract period. The Gehring Group and the City are recommending retaining Cigna for continued medical and prescription drug administration services for an annual not to exceed amount of $915,385.90 which includes a ten percent buffer to allow for fluctuations in costs. This Resolution seeks City Commission authorization to implement a five-year agreement for Medical and Prescription Drug Administration between Cigna and the City for an annual not to exceed amount of $915,385.90.
Fiscal Impact:
Funding for this service will be available in the Fiscal Year 2022 Operating Budget in account number 558.112006.51900.591990.000000.000.000 subject to approval and adoption by the City Commission. The proposed costs for medical administration are projected to decrease by 6.6% from the prior contract.
Recommended for inclusion on the agenda by:
Tammie L. Hechler, Director of Human Resources
George R. Keller, Jr. CPPT, Deputy City Manager