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An ordinance approving Amendment Number 2 to the contract between the Metropolitan Government of Nashville and Davidson County and Cigna Health and Life Insurance Company for administrative services for the account based self-insured medical plan.
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WHEREAS, the Metropolitan Government’s medical insurance plans include an account based self-insured plan and a PPO self-insured plan; and,
WHEREAS, the competitive bidding process for administrative services for the account based and PPO self-insured plans concluded at different times, resulting in different expiration dates for each contract; and,
WHEREAS, the term of the administrative services contract with Cigna Health and Life Insurance Company (“Cigna”) for the account based plan (Contract No. 6518292) commenced on January 1, 2023 and will expire on December 31, 2027; and,
WHEREAS, the term of the administrative services contract with Cigna for the PPO plan (Contract No. 6533123) commenced on January 1, 2024 and will expire on December 31, 2028; and,
WHEREAS, extending the term of the contract for the account based plan to December 31, 2028, will allow for competitive procurement of administrative services for both self-insured medical plans through the issuance of one comprehensive request for proposal; and,
WHEREAS, extension of the administrative services contract for the account based plan will cause the contract term to exceed 60 months; and,
WHEREAS, Section 4.12.160 of the Metropolitan Code limits the term of contracts for services to sixty months, unless otherwise authorized by the Metropolitan Council; and,
WHEREAS, it is in the best interest of the Metropolitan Government to extend the administrative services contract for the account based plan (Contract No. 6518292) by one (1) year with an ending date of December 31, 2028, in order to resolicit the services simultaneously with the administrative contract for the PPO plan (Contract No. 6533123).
NOW THEREFORE, BE IT ENACTED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1: That Amendment Number 2 to the contract between the Metropolitan Government of Nashville and Davidson County and Cigna Health and Life Insurance Company for administrative services for the account based self-insured medical plan (Contract No. 6518292), attached hereto and incorporated herein, is hereby approved.
Section 2: That this ordinance shall take effect from and after its adoption, the welfare of the Metropolitan Government of Nashville and Davidson County requiring it.
Agenda Analysis
Analysis
This ordinance approves the second amendment to a contract between the Metropolitan Government and Cigna Health and Life Insurance Company (“Cigna”) for administrative services for the account-based self-insured medical plan.
The Metropolitan Government entered two contracts with Cigna through a competitive bidding process through the Procurement Office. The first, an administrative services contract for an account-based plan, started on January 1, 2023 and will expire on December 31, 2027. The second, an administrative services agreement for a PPO Plan, commenced on January 1, 2024, and will expire on December 31, 2028.
The proposed amendment would extend the term of the administrative services contract for an account-based plan from December 31, 2027, to December 31, 2028, and add $60 million to the agreement to cover administrative charges for the extended term. This extension would allow for a competitive procurement for both self-insured medical plans through a single, comprehensive request for proposals.
According to the amendment request review, the amendment has no impact on the scope of the original contract.
Section 4.12.160 of the Metropolitan Code of Laws limits the term of service contracts to 60 months, unless authorized by the Metropolitan Council.
Fiscal Note: This amendment extends the terms of the contract 6518292 to December 31, 2028 and increases the estimated value of the contract with Cigna Health and Life Insurance Company for Metro’s group medical insurance by $60,000,000 to cover the administrative charges for the extended term.