Consider and take action on Resolution No. 19-092, approving an agreement with a third party administrator(s) for the City's self-funded health, stop loss and other employee insurance benefits. (Human Resources)

The City is coming to the end of a one year extension agreement with Cigna to be a third party administrator of the City's self-insured health insurance program after a 3-year agreement with Cigna.  In working with the City's insurance broker (Gallagher),  the City went out to bid for Medical Administration, Stop-Loss, and Financial services (HSA, COBRA Administration, FSA) for 1/1/2020.  We had finalist meetings with Cigna (the incumbent) and Blue Cross/Blue Shield of Texas.  After a review of the capabilities of both providers, the committee decided to move forward with the incumbent, Cigna.  We also had finalist meetings from TASC and Discovery benefits covering financial services (Including FSA Administration, HSA(Home Savings Accounts) Accounts, COBRA Administration, and Section 125 Admin).  Because of the pricing and similarity of Discovery’s system to our current, we decided to move forward with Discovery Benefits.  We also decided as a committee to move forward with The Zero Card.  The Zero Card is a bundled payment provider that negotiates to establish direct contracts for services, like Surgeries, MRI, Imaging, and Lab services for less than what insurance companies can get with discounts because they promise to pay cash and not follow typical insurance red tape among other things like locations, etc.  We intend to offer these services to employees on the PPO plan for $0 out of their pockets when employees utilize The Zero Card providers.  In addition to the savings to the employees, the City charges from the providers should produce for the City around a 30% savings before the commission to Zero Card.  It is on limited services and does not affect the overall Cost for Administration.  However, the City anticipates a savings in billings when the Zero Card is used by its employees.

There are no changes in the plan other than the enhancement that employees may use the Zero Card and Cigna will do more interactive assistance with employees to decide on proper medical services and services providers.  Currently, we are not proposing any rate changes to the employees for the benefit and anticipate a reduction in city expenses for the coming year.

All agreements are for one year, so if we are not seeing the results expected, we are not locked in for multiple years.  We can re-bid again next year.

The Committee was comprised of Gallagher (City Broker - Sara Davis & Mike Andrade), Nick Kapatos (City Insurance Consultant), Laura Boyd, Jennifer Price and Nick Finan.  All aspects were updated with the mayor throughout the process.

Please review the attachment for highlights and costs, etc.