SUBJECT/RECOMMENDATION:
Title
Authorize an amendment with Cigna Healthcare (Cigna) for city medical insurance (under a self- insured funding arrangement) and a purchase order to Evernorth Behavior Health (Evernorth) for the employee assistance program for period January 1, 2027 through December 31, 2027, pursuant to RFP 26-22, for a total not-to-exceed amount of $34.0 million ($33,897,264 for Cigna and $60,000 for Evernorth), to be funded by city budgeted funds, payroll deductions of employees and retiree premiums; and authorize the appropriate officials to execute same.
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SUMMARY:
Staff is recommending renewal with Cigna and Evernorth based on overall satisfaction with the services and current benefits, and a favorable renewal rate of a 9.8% total increase. The increase is attributable to higher pharmacy and cancer related claim costs, specifically in the specialty and diabetes pharmaceutical space. Market trend projections indicate medical costs are projected at 8.5% nationally in 2026 with Florida’s costs typically 2%-3% higher than the national averages. The original agreements with Cigna and Evernorth were approved by Council in September 2022 pursuant to RFP 26-22. This renewal is the final (5th) renewal available for the current contract and will be bid for the 2028 plan year for medical and pharmacy coverages.
The overall funding increase of 9.8% is expected to cover projected plan expenses for the 2027 plan year and allow the City to maintain required reserves. Included in the medical premiums for the 2027 plan year is the continuation of the Motivate Me incentive program through Cigna. Under this program, employees can receive incentives (up to $200 per year) when participating in specific preventative healthcare activities. The City’s claims data has shown meaningful improvements in preventive care engagement, early detection screenings, and chronic condition management since MotivateMe was implemented, all of which are associated with improved health outcomes and reduced long-term healthcare risk. These outcomes reflect the positive impact of the City's broader benefits and wellness strategy, of which MotivateMe is an important component.
Some notable results include:
• 31 additional women receiving annual mammograms
• 60 additional women receiving cervical cancer screenings
• 33 additional individuals age 50 and older receiving colon cancer screenings
• 40 additional men age 50 and older receiving prostate cancer screenings
These increases are particularly important because they support earlier detection and intervention, which can improve treatment outcomes and help avoid the significantly higher costs often associated with later-stage diagnoses.
Additionally, when comparing employees who participated in screenings to earn a MotivateMe incentive to those who did not, there are several favorable trends:
• Cancer screening rates are 10 to 30 percentage points higher among incentive earners.
• Compliance with recommended care for hypertension and high cholesterol is approximately 3 percentage points higher among incentive earners.
• Among individuals with obesity and available laboratory data, all participants currently have LDL cholesterol levels below recommended guideline thresholds.
• There have been no diabetes-related hospitalizations and only one diabetes-related emergency room visit among diabetic participants.
These rewards are directly tied to cost drivers on the City’s medical plan and are an essential part of controlling increases over the long term. There is a high utilization and participation in the Motivate Me program. The 2025 total incentives payouts were $72,425 and for 2026 are approximately $31,985 (July).
Historically, the City’s funding rates for medical insurance were 100% for employees without dependents, 75% for employees with one dependent, and 68% for employees with family coverage. In the plan years 2024 through 2026 and moving forward, upon recommendation of the employee benefits committee, the city funded 100%, 75.5%, and 69% in an effort to stabilize employee costs. For the 2027 renewal the employee benefits committee and staff is recommending moving forward and the 9.8% overall increase with employees paying a 7% increase for those with dependents. The remainder of the increase, estimated at $73,932, will be absorbed by health insurance reserves (if needed).
The City’s fiscal 2027 budget for the employer share of health insurance costs is $27,309,288 which includes $25,437,158 across all operations for health plan costs, and $1,872,130 budgeted for the Employee Health Center.
APPROPRIATION CODE AND AMOUNT:
Funds are available in cost codes 5907590-530300 (contractual services), 5907590-545602 (major medical claims), and 5907590-545601 (insurance premiums-EAP). The Central Insurance Fund is an internal service fund of the City which accounts for all insurance related costs.
STRATEGIC PRIORITY:
Superior Public Service: Promote a Diverse and Talented Workforce Through Competitive Opportunity, Employee Wellness and Rewarding Growth
5.4 Enhance Employee health and productivity through a holistic approach to workplace wellness and benefit resources. The medical plan and the Employee Health Center are an integral part of enhancing employee health and productivity and is a benefit resource to attract and retain employees.
