Cigna Cost-Increases and Open Enrollment
Updated: Apr 23, 2022
Email from Kye to Membership, November 24, 2014
(There are four parts to this email, from bottom-up: (1) HR’s open-enrollment announcement, (2) UFCT VP: Emily Beall’s response to delegates, (3) my latest letter to HR Director Tom Greene, and (4) what follows, my email to members which hopefully goes some distance in explaining the matter of Cigna’s drastic cost-increases…)
Many of you are rightfully concerned about what are from any objective stand-point, exorbitant cost-increases to the current Cigna health-care Plans A & B available to many of our bargaining unit members. One hundred twenty-nine full-time and sixty-five adjunct w/CCE faculty are currently enrolled in one of the Cigna plans: Plan A single, Plan A family, Plan B single, or Plan B family.
To be clear, if you are FT or CCE, and on the Self-Insured PPO (closed for any new enrollment since 1998), or an Adjunct (without CCE), and on the Emblem HIP Plan, these Cigna increases do not effect you.
The employer, i.e. the Pratt Institute Administration, through its Human Resources, shops for, and negotiates with health-care providers plan-designs for its eligible employees;
Pratt has a contract with Cigna which recently came-up for renewal (Over the last decade Pratt has been in contract with Cigna, prior to that Oxford, and before that, Aetna…);
Cigna is demanding — as a condition for contract renewal with Pratt — that should the current A & B plan designs go forward without amendment, there will be an across-the-broad increase of 43.8% for each and every employee enrolled in Plans A or B;
Cigna contends they “lost money” this year due to the fact that twelve (12) individual claims each exceeded $100,000 in health-care expense, when their ‘probability-rate’ for the year was just one (1) claim exceeding $100,000;
The UFCT Local 1460 (the union for faculty employees at Pratt) 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 contribution percentage rates for its bargaining unit members;
At present (and since faculty started making contributions to their health-care in 1998), FT faculty contribute 15% to the costs of their health-care plan, while Adjunct w/CCE contribute 25%;
These contribution rates remain the same and are not being increased!
The UFCT met w/HR on November 6th. All relevant break-downs, information, data, and documentation ‘justifying’ these increases was forwarded to the Union, which has since been forwarded to NYSUT for review.
Plan B (the higher of the two options) will continue without loss of benefits but w/a 43.8% increase;
Plan A is being supplanted or replaced by a new ‘equivalent’ (in coverage) plan, although it disallows any out-of-network care. This plan will now feature a ‘high deductible’ of $1,300 for an individual, and $2,600 for a family which must be met before coverage is 100%. The Administration will contribute 100% of these deductibles to a ‘health savings account’ (HSA). The cost increase for this Plan A alternative will be 8.9% higher for 2015 than the current Plan A for 2014;
The open-enrollment period is now.
The UFCT Local 1460 will be seeking arbitration on this matter. We have secured the services of NYSUT health-care analyst and specialist: Sue Klug, who also has served as expert-witness in similar arbitration(s).
The focus of such an arbitration would be on whether it is/was (1) appropriate for Cigna to use an exceedingly low-probability rate in their cost-loss analysis, and (2) whether the new high-deductible alternative plan to Plan A which disallows any out-of-network care, is in the end “substantially comparable” (see: CBA, Article XXVII: Health Benefits, section: 27.2). Odds are we would not prevail in an arbitration. Yet, we have nothing to lose in trying.
However, for the immediate future, which is now, understand that the Union will not demand that Pratt either withdraw these plan proposals or discontinue open-enrollment (see: letter to Greene below), as this would guarantee a 43.8% increase for everyone without exception; our only hope then, that some retroactive reimbursement might come months from now, should we even prevail in an arbitration which as I stated, is doubtful…
This situation is a series of bad options.
We believe we are taking the best (or least worst?) course of action in going forward. Likewise, we can always try and negotiate something new in our forthcoming negotiations, maybe language that addresses cost increases: “no annual percentage increase for any plan institute-wide shall exceed market-rate-increases” (which fall in the 8-10% range…)
You’ll note my soap-box-screed at the end of my letter to Director Greene. This situation is not unique to us. Many of our faculty brethren at both public and private institutions are countenancing the same; our LIU brothers and sisters just down the block included.
————————— UFCT President Kye Carbone’s most recent letter to HR Director Tom Greene
With respect to any necessity in meeting again regarding Cigna plan changes, their increased costs, and the scheduling of open-enrollment, I have spoken w/Judy Sandler who as you know, has been in correspondence with Neil Abramson. Judy informs me that as based on their exchanges, the Pratt Administration awaits a formal response from the Union on what we plan to do going forward.
The Union clearly objects to what we and our members regard as exorbitant 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-rate of one (1) ‘probable’ claim for the year exceeding $100,000, when there were in fact twelve (12) such claims.
It would appear that in low-balling the ‘probable’ costs of delivering health-care to Pratt faculty, Cigna is effectively passing-off their diminished profit-margin to our bargaining unit members to make up the difference at the cost of 43.8%. 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 reasonable in ‘coming-in-low’ only to gouge their Pratt customers at a later date once we have become comfortable w/our plans, coverage, doctors, and health-care providers.
As such, the Union is rightfully concerned about what will be in the end, increased costs 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 in using low-probability rates designed to maximize profits, by passing on exorbitant increases in health-care delivery to the ‘insured’, 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” as enumerated in our Collective Bargaining Agreement w/the Pratt Administration (see: Article XXVII: Health Benefits, section: 27.2).
However, to be clear, the Union will not at this juncture, make any such demands that: (1) Pratt withdraw these plan proposals, or (2) postpone or discontinue the scheduled open-enrollment period ending Friday, December 12th.
The Union is convinced that were we to make such demands, 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. I believe this is exactly what Cigna wants. The Union will not take this bait nor be cuckolded by Cigna in appearing to be standing in the way of members having a choice between their current plan design, and now, a new high-deductible plan alternative.
The Union acknowledges the work you, your consultants, and your HR staff have endeavored in negotiating a plan alternative w/Cigna, albeit w/what appears — on its face — to be onerous high deductible(s). Further, we appreciate your ceding to our demand that should said plan have to go forward, only a 100% administrative contribution to these deductibles could possibly take some of the sting out of what is still a bitter-pill to swallow for the average faculty member. Point being, faculty do have a choice, while the plan options are less-than-ideal from our perspective.
Lastly, as long as I have a soap-box, I will state unequivocally as many times as is necessary that what we all are having to countenance with ‘for profit’ health-care ‘providers’ is a national disgrace.
If you feel it necessary to meet, we will of course oblige.
UFCT VP Emily Beall’s letter to delegates
In response to the discussion about the 43% increase in premiums for the Cigna plans:
This is a union issue. The Grievance Team notified Pratt Administration yesterday that they would be filing a Step IV grievance for Arbitration on this matter.
Firstly, for context: the union negotiates the percentage of premiums a faculty member pays for the health plan available to them. Our contract specifies that: Full Time contribute 15%, CCE contribute 25%, and Adjuncts contribute 50%. Full Time and CCE are on the Cigna plans; Adjuncts are on the HIP plan.
We have little room to negotiate the specifics of a given plan; this is because the Administration must negotiate with the various health care providers (e.g. Cigna, Emblem) to in effect buy coverage (keep in mind these are for-profit entities, in effect syndicates who cannot countenance not making a ‘healthy’ profit).
However, the percentages of premiums faculty cover (15%/25%/50%) aren’t what’s at issue here. What’s at issue is that Cigna raised their premiums 43% from last year to this, and thus the Administration is asking faculty to pay 43% more for their coverage from what they did last year (whether they’re contributing at 15% or 25%).
So: our contract also specifies that Pratt has the right to change plans or coverage so long as (1) they make that same change for administrators, too, and (2) the new plan provides “substantially comparable” benefits to the current plan (Article 27.2)
The Grievance Team notified administration yesterday that they would be filing a grievance in response to this change in plans available to FT and CCE, as what is being offered to those faculty for 2015 does not provide “substantially comparable” benefits. That a FT or CCE member enrolled should suddenly have to pay 43% more toward their health coverage, or loose out-of-network coverage and still pay 8.9% more, is not only NOT “substantially comparable” to what was provided before, it is egregious and unacceptable–too bitter a pill to swallow.
Union Leadership stands for our members on this, and the Grievance Team will be pursuing this grievance vigorously and as quickly as possible. We have engaged NYSUT’s Health Care specialist to aid us in our grievance; it is my understanding other effected Unions on campus are similarly grieving this change.
This situation has developed rapidly; the Union will update membership at large by week’s end. We will keep Delegates and Membership posted as the Grievance Team goes forward. Meantime, thanks for reading, and I’m glad to answer any further questions Delegates have on this matter.
In solidarity, Emily
Open Enrollment Announcement
From: Thomas Greene <firstname.lastname@example.org> Date: Tue, Nov 18, 2014 at 10:15 AM Subject: Open Enrollment – Pratt Cigna Medical Plan To: email@example.com
This is to inform you that Open Enrollment for Pratt employee benefits will begin immediately and continue from November 17 through Friday, December 12, 2014. Open Enrollment is the time when eligible employees can enroll in and/or make changes in their employee benefits, including medical, dental, retirement, commuter benefits and flex spending accounts. It’s also an opportunity for employees to gain more information about benefits and ask the Benefits staff any questions.
Open Enrollment was delayed this year while we considered significant changes to the Cigna medical plan. As a result of a very high increase in the premiums paid to Cigna effective in 2015, Pratt will be modifying the plan options offered to employees to choose from:
The High Plan offered by Cigna will remain as an option. As the Cigna premiums will be increasing by 43.8%, employee contributions (through payroll deductions) will increase by the same amount.
The Low Plan will be replaced by a High Deductible Health Plan (HDHP) with a Health Savings Account (H.S.A.). This plan differs from the existing Low Plan in that members are limited to the Cigna network for medical care and a deductible must first be met by the member ($1,300 individual/$2,600 family) after which all medical care is covered 100%. However Pratt will fund 100% of the deductible for members enrolled in this Plan for 2015.
Information sessions about the new HDHP w/H.S.A. plan are scheduled for the following dates and times:
Monday, November 24, 2014, Pratt Manhattan, Room 213, 3-4:30p
Thursday, December 4, 2014, Engineering Room 307, 12:30-1:30p & 2:30p-3:30p
Monday, December 8, 2014, Alumni Reading Room, 12:30-2p
All employees enrolled in a Cigna medical plan are strongly encouraged to review the options carefully to ensure they are enrolled in the appropriate plan option for their medical needs. An employee currently enrolled in the Low Plan will be automatically enrolled in the HDHP with H.S.A. unless s/he actively selects a different option during Open Enrollment. Likewise an employee currently enrolled in the High Plan will remain in the High Plan unless s/he selects otherwise.
More information on the options and employee contributions is available on the HR section of my.pratt. In the meantime, you are able to make changes to all other benefit plan changes.