GARY — Mayor Karen Freeman-Wilson said her administration carefully weighed employee impact against costs savings before opting to go with AIM Medical Trust as the city’s new health care provider.
Open enrollment meetings at the Genesis Center wrapped up this week for the 900 employees affected by the city’s abrupt switch from CIGNA to a new provider.
“The major factor was the cost of the plan, but we tried to weigh the impact to employees and tried not to make it too great,” Freeman-Wilson said.
Meanwhile, Gary continues to pay down $4.6 million in overdue payments to its former insurance company, CIGNA.
City government paid $1.6 million to CIGNA last week and will pay the remaining $3 million balance by year’s end after consistently lagging three months behind in payments for some time.
The city’s switch from CIGNA to AIM Medical Trust will result in $832,000 in savings next year, and the decision had nothing to do with the city’s inability to pay CIGNA on time, Freeman-Wilson said.
Employee cost was a key factor in the decision to go with AIM, she said. The original goal was to save $1 million, but providers that promised that level of savings came with too many stipulations or offered limited plans.
The majority of employees have gone with the traditional PPO plan, but 11 employees have so far opted for AIM’s high-deductible plan, and their paycheck contributions have nearly doubled.
Family coverage rates vary, from $201.23 bi-weekly for PPO, to $174.42 bi-weekly for the HDHP.
Paycheck contributions are up about 11 percent — from $118 to $132.09 — for employee/spouse coverage.
PPO deductibles have significantly increased, nearly doubling in many cases, while co-pays for doctor and specialist visits are down.
The largest savings will be through the office visits, free hearing aids and diabetic-related standard medication and supplies for employees, Freeman-Wilson said.
Dental and vision coverage will remain with CIGNA, as its price was more competitive.
The switch to a new health care company is part of the administration's financial recovery plan aimed at tackling the city's $17 million budget deficit.