Cigna Grievance

Email from Kye to Membership, December 12, 2014
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Dear Concerned Members,
W/respect to the ‘extreme’ Cigna cost increases being imposed on Pratt faculty, please read the attached grievance statement as filed on 12/10/14.
The UFCT Local 1460 is determined to pursue arbitration if the Administration’s response to the attached formal grievance statement is less than satisfactory.
Warm Regards,
-Kye

 

MEMORANDUM

TO:                   Peter Barna, Provost

FROM:             Kye Carbone, President UFCT Local 1460

DATE:               December 10, 2014

RE:                    Step III Grievance:

Cigna Plan Changes & Extreme Cost Increases

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One hundred twenty-nine full-time and sixty-five adjunct w/CCE UFCT Local 1460 faculty bargaining unit members are currently enrolled in one of four Cigna plans: Plan A/single, Plan A/family, Plan B/single, or Plan B/family.

Likewise, many of our bargaining unit members are rightfully concerned about what are — from any objective stand-point – extreme cost-increases to these Cigna Plans.

CONTEXT

  • The employer, i.e. the Pratt Institute Administration, through its Human Resources, shops for, and negotiates with various health-care providers, plan-designs for its eligible employees;
  • Pratt’s contract with Cigna recently came-up for renewal. (For the record: over the last decade Pratt has been in contract with Cigna, prior to that Oxford and before that Aetna…);
  • Cigna is demanding — apparently as a condition for contract renewal with Pratt — that should the current A & B plan designs go forward without amendment or change, there will be an across-the-broad increase of 43.8% for each and every employee currently enrolled in Plans A or B;
  • Cigna contends they “lost money” this past year due to the fact that twelve (12) individual claims each exceeded $100,000 in cost, when their ‘probability-rate’ (or cost-loss ratio) for the year was just one (1) claim potentially exceeding $100,000 in cost;
  • The UFCT Local 1460 does not negotiate directly with any health-care provider. We only negotiate w/the Pratt Administration: (1) who should be ‘benefits eligible’ and (2) the respective contribution or percentage rate(s) for its bargaining unit members;
  • At present a FT faculty member contributes 15% of the cost of their health-care plan, while an Adjunct w/CCE contributes 25%. These contribution rates remain the same and are not being increased.

The UFCT met w/HR on November 6th. Break-downs, information, data, and documentation ‘justifying’ the aforementioned Cigna increases were forwarded to the Union, which we have since forwarded to the Local’s State Affiliate: NYSUT for its review.

PLAN PROPOSALS

  • Plan B (the higher of the two options) will continue without loss of benefits but w/a 43.8% increase;
  • The current Plan A will be supplanted or replaced by a new ‘equivalent’ (in coverage) plan, although it disallows any out-of-network care. Moreover, this plan will now be a “High Deductible” alternative, i.e. wherein $1,300 for an individual, and $2,600 for a family plan, must be met before coverage is 100%. The Administration is proposing that they will contribute 100% of these deductibles to respective HSAs or ‘health savings account(s)’. The cost increase for this Plan A alternative will be 8.9% higher for 2015 than the current Plan A for 2014.

Grievance Statement

This Union clearly objects to what we and our members regard as exorbitant, irrational, extreme, and unjustifiable 43.8% increases in the costs of our bargained for health benefits. Cigna’s justification for such extreme increases, as was explained to us at our November 6th meeting, was Cigna’s inexplicable use of a low probability-cost-loss-ratio of one (1) ‘probable’ claim for the year exceeding $100,000, when there were in fact twelve (12) such claims.

It would appear then from the UFCT’s perspective, that in deliberately low-balling the ‘probable’ cost(s) of delivering health-care to Pratt faculty, Cigna is passing-off their diminished profit-margin to the unsuspecting bargaining unit member; who to the tune of a 43.8% increases in cost, will effectively subsidize Cigna’s so-called “loss”. This form of accounting is from the Union’s perspective, dubious at best, and possibly a calculated maneuver on Cigna’s part to appear as benevolent in ‘coming-in-low’ (two years ago) only to gouge their Pratt customers at a later date once we have become comfortable w/our plan-coverage, doctors, and/or health-care providers.

As such, the Union is rightfully concerned about what will be in the end, significant cost-increases to its members, and reserves all rights in contesting through the proper forum: Arbitration: (1) whether Cigna is permitted by law to fleece its customers or the ‘insured’ in using low-probability rates designed to maximize profit, and (2) whether the new high-deductible alternative plan replacing the current Plan A — disallowing any out-of-network care — is in fact “substantially comparable” in accordance w/the 2011-2015 CBA, Article XXVII: Health Benefits, section: 27.2.

To be clear, this Union will not and has not made any demands of the Pratt Administration to: (1) ‘cease and desist’ in withdrawing these plan proposals, or (2) postpone or discontinue its scheduled open-enrollment period… as the Union is convinced that were we to make any such demand(s), the fall-out would most assuredly guarantee that each and every member currently on either of the Plan A or B options, would be gifted by Cigna a draconian 43.8% increase to their respective health-care contribution(s) for the new 2015 year.

The Union believes this is exactly what Cigna wants. We will not be party to such antics.

As such, the Union will not take the bait nor be cuckolded by Cigna in appearing to be standing in the way of members having a choice between their current plan designs, and now, a new high-deductible plan alternative.

Remedy

A formal hearing in which a full-review of all related information & data; cost analyses, and break-downs are presented to the Union, explaining how Cigna was able to impose such extreme increases to the insured.

Questions:

  • Did Pratt ‘shop-around’ for another health-care provider other than Cigna?
  • If so, why did Pratt then choose to renew its contract w/Cigna?
  • Has Cigna acted in good faith?
  • Are Cigna business practices par-for-the-course? Do they meet a reasonable standard with respect to profit, and do such practices comport w/recognized norms within the health-care industry?