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HR director recommends switching city health plan to Cigna, adds high-deductible HSA option
Summary
Human resources director Tabitha Adkins recommended switching the city's health insurance to Cigna and offering a $2,500 high-deductible plan with an employer-funded HSA contribution; staff said the change would drive roughly an 8% employer cost increase and raise dependent premiums for employees who keep the lower-deductible plan.
Tabitha Adkins, the city's human resources director, told the commission staff recommend moving the city's group coverage to Cigna and adding a high-deductible health plan (HDHP) paired with a health savings account (HSA). Adkins said the insurance market pushed rates into the high teens and twenties for many municipal groups this year, and staff solicited bids to reduce exposure.
"When we did get, the league, which is UnitedHealthcare, which is who we currently have, when we got that back, it was at 19.9% to keep what we had with our experience," Adkins said, describing the initial renewal. After negotiations and additional options, she said the best proposals came in near an 8% employer cost increase overall.
Adkins recommended a structural change that would keep a conventional plan with a $750 deductible and add an HDHP with a $2,500 deductible so employees could use an HSA. "The recommendation is to go with Cigna, to change over to Cigna, to add the additional plan," she said. Under staff's projection, employer costs would rise roughly 8.1% and employees who keep dependent coverage on the conventional plan would see their premiums increase by about 20%.
Commissioners asked about provider networks and the number of employees likely to choose the HDHP. Adkins said plan-network overlap is high: "We have a 98% match with our doctors, for the network with Cigna and UnitedHealthcare," and staff estimated a significant but uncertain take-up for the HDHP in year one.
The presentation also flagged a dental-network risk: staff identified roughly 60 employees who use a dentist that may be out-of-network under Cigna; Adkins said she had contacted the office and the dentist declined to remain in network for the larger plan, which informed the trade-offs presented to the commission.
Staff said details on exact employee-share dollar amounts and a full breakdown of who pays what will be provided to commissioners by email and in follow-up materials before adoption.
