title
Resolution Authorizing the City Manager to Enter Into a Professional Services Agreement with CIGNA Health and Life Insurance Company for Medical Insurance Coverage and Related Administrative Services
body
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Department: |
Human Resources |
Meeting Date: |
4/7/2026 |
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Contact Name: |
Kim Sampson |
Public Hearing: |
No |
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Contact Phone: |
910-341-7840 |
Advertising Date/Advertised By: |
N/A |
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Attachments: |
Attachment #1: Resolution |
PURPOSE:
The purpose of this resolution is to authorize the City Manager to execute a three-year professional services agreement with CIGNA Health and Life Insurance Company (“CHLIC”) to serve as the City’s third-party administrator for medical, pharmacy, and related services, replacing UMR.
BACKGROUND:
As part of the City’s commitment to becoming an employer of choice, staff conducted a competitive Request for Proposals (“RFP”) process to evaluate third-party administrative services for medical and pharmacy benefits. Five qualified vendors submitted proposals, which were evaluated by the City’s Benefits Committee based on network access, service integration, financial terms, pharmacy rebate guarantees, customer service capabilities, transition support, and long-term cost sustainability.
Following this review, the Benefits Committee recommended CHLIC as the best overall option. The proposed partnership provides:
• A fully integrated medical, pharmacy, and behavioral health platform
• Access to a national provider network with expanded mental health coverage
• Significant prescription rebate guarantees
• Administrative fee waivers to support implementation and cost management
• Dedicated annual funding for wellness or technology initiatives
• 24/7/365 customer service support for employees and families
Importantly, the proposed transition is designed to result in minimal disruption to employees and retirees. The national provider network offered through CHLIC provides broad access to many of the same physicians, specialists, and healthcare facilities currently utilized by employees, helping maintain continuity of care while enhancing overall service integration.
This transition also supports the City’s goal of strengthening its total compensation strategy. The City recognizes that total compensation includes both salary and benefits, and competitive health coverage is essential to attracting and retaining a high-performing workforce.
Additionally, the agreement allows the City to transition to a calendar-year plan cycle. This alignment provides the next six months for a comprehensive review of plan design and the development of recommendations to enhance the competitiveness of the City’s health insurance offerings, while improving budgeting accuracy and market benchmarking.
budget
BUDGET IMPACT:
Based on current enrollment projections, the total anticipated fee costs under the proposed three-year agreement are as follows:
• FY27: $1,422,832
• FY28: $1,715,934
• FY29: $2,090,161
These estimated costs include fees for administrative services, stop-loss coverage, compliance-related fees, and related professional services. The guaranteed financial structure and rebate commitments provide long-term cost predictability and support sustainable healthcare cost management.
The transition to a calendar-year renewal cycle will also improve financial forecasting and allow clearer communication of benefit changes to employees and retirees.
recommendation
RECOMMENDATION / ACTION REQUESTED:
Staff respectfully recommends that City Council adopt the resolution authorizing the City Manager to enter into a three-year professional services agreement with CHLIC.
This action strengthens the City’s benefits program, enhances employee support, advances the City’s goal of becoming an employer of choice, and positions the organization for responsible long-term healthcare cost management.