Placement: Consent Agenda
Action Requested: Motion / Vote
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Approve the Conceptual Selection of Cigna Health and Life Insurance Company (“Cigna”) as the City’s Medical Benefits Provider
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Submitted By: Natalie Cabrera, Director, Human Resources
Strategic Plan Link: The City’s Mission to utilize fiscal responsibility.
Executive Summary (General Business): Approve the conceptual selection of Cigna Health and Life Insurance Company (“Cigna”) as the City’s medical benefits provider, subject to the successful negotiation of a final agreement, and authorize the City Manager, or his designee, to finalize contract negotiations and return to City Council for approval of the final agreement.
Presentation Information: Staff is available to answer questions the Council may have.
Staff Recommendation: Move that the Council approve the conceptual selection of Cigna as the City’s medical benefits provider subject to the successful negotiation of a final agreement and authorize the City Manager, or his designee, to finalize contract negotiations and return to City Council for approval of the final agreement.
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve the conceptual selection of Cigna as the City’ medical benefits provider subject to the successful negotiation of a final agreement.
2. Move that the Council deny the request and provide staff direction.
Background: The City, through its third-party administrator, released a Request for Proposals to the market for medical benefits. Based on the proposals received, and after conducting due diligence, it was determined that Cigna Health and Life Insurance Company best meets the City’s objectives of providing quality healthcare coverage while supporting the City’s long-term financial and operational goals.
Issues/Analysis: Although the parties have reached agreement on the proposed rates, negotiations regarding the final contract terms and conditions remain ongoing. Staff continues to work with Cigna to finalize the agreement, including standard contractual provisions addressing administration, performance expectations, compliance, and other legal and operational requirements. Approval of this item authorizes staff to proceed with the continued negotiation of a final agreement based on the proposed rates. The final contract will be presented to Council for approval upon reaching acceptable terms and conditions.
Financial Information: The proposed premium rates are summarized in the attached rate sheet. Final fiscal impacts will be incorporated into the City’s medical trust fund. However, rates charged to both the City and the Employees will remain as charged during FY 25/26. In other words, there are no anticipated cost increases for medical coverage for FY 26/27 by transitioning to Cigna.
Special Consideration: The proposed medical plan with Cigna maintains the City’s existing plan design and benefit structure, providing continuity of coverage for eligible employees and their dependents. In addition, Cigna’s provider network offers expanded access to in-network physicians and specialists. Staff requests City Council approval of the proposed rate sheet and authorization to continue negotiations with Cigna. Approval at this time is necessary to secure the proposed premium rates in advance of the City’s August 2026 open enrollment period. The final agreement remains subject to the successful negotiation of mutually acceptable terms and conditions.
Location of Project: N/A
Business Impact Statement: N/A
Attachments:
1. Medical and Pharmacy Year 1 Financial Summary;
2. Medical ASO Evaluation;
3. Medical Plan Design.
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 26167-06
Legal Sufficiency Review:
Reviewed by Alyssa Lunin, Senior Deputy City Attorney. Approved as to Legal form and sufficiency by Richard Berrios, City Attorney.