Cromwell board hears preliminary 52% Cigna renewal; brokers exploring carve-outs, partnership and other bids
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Summary
Insurance brokers told the Cromwell Board of Education that a preliminary Cigna renewal for the town+board is 52%, citing a worsening loss ratio driven by expensive prescriptions and many high-cost claimants; brokers said Aetna declined and they'll return with alternative quotes and partnership estimates at the next meeting.
Insurance brokers from the Alara Group told the Cromwell Board of Education on Feb. 3 that a preliminary renewal from Cigna would raise the district's health-insurance costs sharply. "The Cigna preliminary renewal came in at 52%," broker Dave Caslin said, attributing the increase to a worsening loss ratio and concentrated high-cost claims.
The broker described two related trends driving the jump: a growing share of prescription-driven costs and an unusually large number of expensive claimants. He reported there were 73 claimants with more than $25,000 in claims in the past 12 months across the town and board combined, and 24 claimants with claims above $100,000. "When they ran the analysis, they're basically spending a dollar 30 for every dollar of claims," Caslin said.
Board members pressed the brokers on alternatives. The Alara team said they have marketed the combined town-and-board data to remaining carriers, have asked Cigna whether a board-only carve-out would produce a better rate, and are running a self-insured feasibility analysis. They also said the state's partnership plan—which offers state-employee-style benefits on a quarterly-pricing schedule—could be an option but partnership rates for a July 1 effective date may not be released until late February or early March.
When asked which carriers remained in the running, brokers reported that Aetna declined the business with an estimated 72–73% increase; UnitedHealthcare and Anthem were named as remaining options. The brokers committed to return to the board at its Feb. 24 meeting with market bids and any partnership information available by that date.
Board members and administration repeatedly noted the contract and collective-bargaining implications of switching plans. Several trustees asked whether union agreements would require reopener negotiations to change plans; administrators said that moving a bargaining unit into a different plan would typically require reopening contract language and the unions could decline.
The board directed the brokers to seek quotes for: (1) the current combined town-and-board plan; (2) a board-only carve-out; (3) self-insured feasibility figures; and (4) the partnership-plan estimates when they become available. The brokers said they would return with that information for further budget planning.
The immediate next procedural step is for the brokers to provide competitive quotes before the board's next meeting; the board also signaled it will use that information to model multiple budget scenarios if the final renewal remains substantially higher than the administration's 25% planning assumption.
The board did not take any formal vote on insurance at the meeting; discussion was recorded as direction to staff to pursue options and return with detailed comparisons.