Same Cigna network, new financial risk: health-plan switch wins approval

Sandy Springs, Georgia, has approved moving its employee medical plan to self-funding for 2027, with a Jan. 1 transition planned. Cigna would remain the administrator and keep the current provider network and medical plan designs—but the city’s plan would fund eligible claims directly.⁠[1][2]

Our earlier report on the proposed health-plan switch described authorization still ahead. The Oct. 20 meeting minutes now record unanimous approval of Ordinance No. 2026-10-022, establishing an Employee Benefits Fund and authorizing the city manager to execute the 2027 agreement. They do not establish that the agreement has been signed.⁠[1]

The financial trade-off is substantial. Staff projects an expected medical-program cost of $10.65 million and recommends budgeting a maximum projection of $12.73 million, including city and employee contributions. Staff puts the expected cost 18% below the fully insured renewal quote; the maximum projection is only about 2% lower. Actual spending can vary with claims, enrollment, reimbursements and rebates.⁠[2]

The proposed protection against high-cost claims includes stop-loss insurance, generally with a $200,000 individual threshold, plus aggregate coverage. But the package also includes approximately $700,000 in additional liability for known high-cost claims. Those claimant-specific exceptions require the city to pay more before insurance begins reimbursing the plan.⁠[2]

For employees, staff recommended a 20% increase in medical-plan contributions—the first increase since 2021—while keeping employee-only coverage under the HSA Base Plan fully city-paid.⁠[2]

Pharmacy rebates are already part of the projected savings: the comparison table subtracts an estimated $446,000 from Cigna’s self-funded costs. Cigna has offered to pass through all eligible rebates, but staff says it will seek contract language defining eligibility and capturing applicable manufacturer-related revenue. Some rebates attributable to 2027 may not arrive until 2028.⁠[2]

Staff also promises greater access to claims and pharmacy data and contractual audit rights, subject to privacy, confidentiality and proprietary-information limits. Those are staff-described protections, not verified terms of an executed agreement.⁠[1][2]

One financial discrepancy remains unresolved in the reviewed records: staff recommended a $12.73 million appropriation, while the unsigned ordinance in the packet used an $11.34 million estimate. The minutes confirm approval but do not specify the adopted financial terms or reconcile those figures.⁠[1][2]