Agenda 09/25/2012 Item #11F 9/25/2012 Item 11 .F.
EXECUTIVE SUMMARY
Recommendation to approve the purchase of Group Dental Insurance through
Cigna Dental Plan, Inc. for a two year period effective January 1, 2013 in an
estimated annual premium of$1,626,697, a reduction of$103,824.
OBJECTIVE: To gain Board approval to purchase Group Dental Insurance through CIGNA
Dental Plan for a two year period effective January 1, 2013.
CONSIDERATIONS: The Board of Commissioners through its Risk Management Department
administers the group benefits program for the County Manager's agency and participating
Constitutional Officers. Group Dental Insurance is offered as part of the program. Coverage is
provided by Cigna Dental Plan, Inc. under a fully insured PPO arrangement.
In anticipation of the January 1, 2013 renewal, staff directed the County's contracted benefits
broker, Willis, Inc., to seek proposals from interested Dental Insurance carriers.
Willis received proposals from seven carriers and performed a ranking analysis. A primary
consideration in the analysis was the ability of each carrier to offer competitive pricing coupled
with a multiple year rate guarantee. Additional criteria that were analyzed included compliance
with existing coverage terms; provider network size; and the reimbursement of out of network
fees at the 95% Usual and Customary level. Firms were then ranked according to this analysis
which narrowed the finalist list to two carriers, CIGNA and Delta Dental. They were the only
carriers to offer the greatest percentage rate reductions off the current rate when combined with
a two year rate guarantee. Both carriers also pay out of network benefits at the 95% Usual
Customary Rate level; presented coverage terms that match the current program; and had the
broadest provider networks.
To arrive at a final recommendation, Willis performed a Provider Disruption Analysis to measure
the impact of a carrier change on members. Willis modeled paid historical claims volume
through each carrier's network. The analysis showed that CIGNA's in-network savings is
$190,695 more than the Delta network. The analysis also showed that the percentage of in-
network claims is 52% under CIGNA compared to Delta's 38% (Basic Plan).
This means that based upon historical claims, members utilize in-network providers at a higher
frequency under CIGNA than they would if under the Delta network. This saves both the plan
and the employee money. As a result, many members would experience higher out of pocket
costs under the Delta Plan via cost shifting. It also means that many members would have to
change dentists in order to remain in network. Although annual premium savings under the
Delta plan were slightly greater than CIGNA ($36,520 per year), actual premium savings to the
employee ranged from only$.10 (ten cents)to $.64 (sixty-four cents) per paycheck. Therefore, it
is staff's opinion that these savings are negated by the potential risk of increased out of pocket
costs; the potential need to change dentists; and the administrative cost to transition to a
different carrier.
Finally, claims adjudication under CIGNA has been prompt and responsive as issues arise.
Cigna has worked diligently to expand the provider network in Collier County. The number of
network providers has grown from twenty-eight (28) providers in 2005 to over one hundred
twenty six providers (126) in 2012.
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9/25/2012 Item 11.F.
There are no other changes to the terms and conditions of the program.
FISCAL IMPACT: The estimated cost of the program in calendar year 2013 based upon
average enrollment of 1,870 employees is $1,626,697, a reduction of $103,824. These costs
include both the employer and employee contributions. Final cost is dependent upon enrollment
by plan (Basic vs. Select) and tier (Single vs. Family). Rates are guaranteed for a two year
period. Sufficient funds are available within Fund 517, Group Health and Life Insurance for this
purchase.
GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with
this item.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney's Office,
requires majority vote, and is legally sufficient for Board action. —CMG
RECOMMENDATION: That the Board approves the purchase of Group Dental Insurance from
Cigna Dental Plan, Inc. with a two year rate guarantee effective January 1, 2013 and ending
December 31, 2014.
PREPARED BY: Jeffrey A. Walker, CPCU, ARM, Director, Risk Management
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9/25/2012 Item 11 .F.
COLLIER COUNTY
Board of County Commissioners
Item Number: 11.F.
Item Summary: Recommendation to approve the purchase of Group Dental Insurance
through Cigna Dental Plan, Inc. for a two year period effective January 1, 2013 in an estimated
annual premium of$1,626,697, a reduction of$103,824. (Jeff Walker, Risk Management
Director)
Meeting Date: 9/25/2012
Prepared By
Name: WalkerJeff
Title: Director-Risk Management,Risk Management
8/31/2012 9:41:12 AM
Submitted by
Title: Director-Risk Management,Risk Management
Name: WalkerJeff
8/31/2012 9:41:15 AM
Approved By
Name: pochopinpat
Title: Administrative Assistant,Facilities Management
Date: 8/31/2012 9:59:33 AM
Name: GreeneColleen
Title: Assistant County Attorney,County Attorney
Date: 8/31/2012 2:54:04 PM
Name: PriceLen
Title: Administrator, Administrative Services
Date: 9/13/2012 3:06:52 PM
Name: GreeneColleen
Title: Assistant County Attorney,County Attorney
Date: 9/14/2012 8:12:49 AM
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9/25/2012 Item 11 .F.
irnikt
Name:KlatzkowJeff
Title: County Attorney
Date: 9/14/2012 10:09:00 AM
Name: FinnEd
Title: Senior Budget Analyst, OMB
Date: 9/17/2012 11:36:32 AM
Name: OchsLeo
Title: County Manager
Date: 9/17/2012 1:31:47 PM
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9/25/2012 Item 11 .F.
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