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Finance committee recommends Cigna Direct health plan after reserve, equity debate
Summary
The Coventry Finance Committee on Feb. 17 recommended the Town Council adopt the Cigna Direct health insurance plan after discussing pooled reserves, differing BOE contributions, and short‑term budget impacts; the motion passed unanimously.
The Coventry Town Council Finance Committee recommended on Feb. 17 that the full council select the Cigna Direct health insurance plan for the coming plan year, following a lengthy review of pooled reserves and how past claims have affected contributions.
Chair Robyn Gallagher said the Town Council received an update from the Board of Education that the BOE plans to select the Cigna Direct plan as recommended by district and town advisers. Finance Director Cherie Trahan distributed a comparison between the state plan and the town’s current plan and estimated combined reserves for the town and BOE at about $1 million. Trahan noted that while benefits would remain the same under Cigna Direct, the plan would be administered directly by Cigna rather than through ECHIP.
Members debated how past high claims concentrated among town employees have affected the pooled fund and whether the BOE’s decision and budgeting assumptions treat the combined reserve fairly. Town Manager James Drumm explained that when claims were tracked separately it became clear the town had run deficits in years with high claims, while the BOE had fewer such claims. Councillor Julie Blanchard requested a history of the town’s funding contributions to understand whether the BOE’s claim that "the Town Council is behind them in self‑funding" is supported by the record.
The committee discussed mechanics for setting budgeted increases: Trahan said the typical approach is to apply the ECHIP rate adjustment to both parties, but the town has sometimes budgeted a lower percentage in lean years while the BOE continued to contribute the full percentage. Committee members discussed whether and how to draw down reserves to reduce rate increases; Trahan suggested an example drawdown amount (for example, $200,000) would reduce rates for both town and BOE.
After discussion, Peter Larson moved and Chair Robyn Gallagher seconded the recommendation that the full Town Council select the Cigna Direct health insurance plan. The motion passed unanimously.
What happens next: The Finance Committee’s recommendation goes to the full Town Council for final action. Committee members said they plan to continue reviewing options during upcoming budget discussions and to seek further detail on the reserve history and how BOE budget offsets will be applied.
