CIGNA IN TEXAS

Cigna Product Types and Company Names
Product Types and Company Names

Product availability may vary by location and funding type and is subject to change. The legal entity insuring or administering any group product will vary depending on the group's location, the number of employees and the types of plans or products being offered.

The following chart shows the product types available and the Cigna companies that insure or administer these products in Texas:

Texas Group Product TypesCigna Company Name(s)
  • HMO*
  • HMO Open Access*
  • In-Network benefits of HMO POS
  • In-Network benefits of Open Access HMO POS(Direct Access)
Cigna HealthCare of Texas, Inc.
  • Voluntary, Limited Benefit Plans
  • Out-of-Network benefits of HMO POS
  • Out-of-Network benefits of Open Access HMO POS (Direct Access)
Connecticut General Life Insurance Company
  • Preferred Provider Organization (PPO)
  • Open Access Plus (OAP)
  • LocalPlus
  • Indemnity
  • Cigna Choice Fund®
Connecticut General Life Insurance Company or Cigna Health and Life Insurance Company
  • All self-funded medical plans, including Network, Open Access Network, Network POS, Open Access Network POS, OAPIN, LocalPlus IN and Cigna Consumer Advantage® plans
Connecticut General Life Insurance Company or Cigna Health and Life Insurance Company
  • Cigna Dental Care (DHMO)
Cigna Dental Health of Texas, Inc.
  • Cigna Traditional (Dental Indemnity)
  • Cigna Dental Choice
  • Cigna Dental Care® Value Plans
  • CignaFlex Advantage®
Connecticut General Life Insurance Company or Cigna Health and Life Insurance Company
  • All self-funded dental plans including Dental PPO, Dental EPO
Connecticut General Life Insurance Company or Cigna Health and Life Insurance Company
  • Cigna Vision Plans (available as riders with a Cigna Health Benefit Plan)
Same company as Health Benefit Plan
  • Cigna Vision PPO
Connecticut General Life Insurance Company or Cigna Health and Life Insurance Company
  • Cigna Managed Pharmacy Plans (available as riders with a Cigna Health Benefit Plan)
Same company as Health Benefit Plan
  • Term Life Insurance
Life Insurance Company of North America
  • Group Universal Life Insurance
Connecticut General Life Insurance Company
  • Personal Accident Insurance
  • Business Travel Accident Insurance
  • Accidental Death and Dismemberment Insurance
  • Accidental Injury Insurance
  • Hospital Indemnity Insurance
  • Critical Illness Insurance
Life Insurance Company of North America
  • Short-Term Disability Insurance
  • Long-Term Disability Insurance
Life Insurance Company of North America
  • Stop-Loss Insurance
Connecticut General Life Insurance Company or Cigna Health and Life Insurance Company
  • Employee Assistance Program (EAP)
Cigna Behavioral Health, Inc.
  • Cigna Onsite Health®
Cigna Onsite Health, L.L.C.
  • Cigna Home Delivery PharmacySM
Tel-Drug, Inc. and Tel-Drug of Pennsylvania, L.L.C.

*In Texas, these lock-in products cannot be offered on a stand-alone basis and must be accompanied with the option to choose a plan that offers out-of-network benefits.

Group Health Benefit Plans
General Information

In Texas, we offer a variety of health benefit plans, on an insured or self-funded (ASO) basis.

 

Examples of the types of health benefit plans available to Texas residents include, but are not limited to:

Cigna Choice Fund Plans

Cigna's Consumer Driven Health Plans are available on both an insured and self-funded (ASO) basis. In Texas, our Cigna Choice Fund Health Reimbursement Account (HRA) and Health Savings Account (HSA) products are currently offered to employer groups with 51 or more employees. Cigna Choice Fund Plans offers a wide variety of programs, product types (PPO, OAP, and Indemnity) and services that can help improve health and well-being while saving and planning for future costs, including HSA's, HRA's and Flexible Spending Accounts (FSA).

Health Maintenance Organization (HMO)

HMO plans are available on a guaranteed cost basis. HMO Plans offer access to quality health care from a broad network of participating health care professionals. During enrollment, customers choose a Primary Care Physician (PCP) who may provide routine care, coordinate care and provide referrals to in-network specialists and facilities.

Point of Service (POS)

POS plans are available on both an insured and a self-funded (ASO) basis. POS Plans offer customers choice as to where to get care. To get the most from a POS plan, choose an in-network Primary Care Physician (PCP) to coordinate care and receive care from a provider in the Cigna HealthCare® Network. In POS plans, customers also have the choice to see whomever they want; however, when care is received from a doctor or facility that is not in the Cigna HealthCare network, out-of-pocket costs will be higher. The in-network benefits of the insured POS plans are comparable to HMO benefits and the out-of-network benefits of the Cigna POS plans are comparable to Indemnity benefits.

Network

Network plans are available only on a self-funded (ASO) basis. Network plans offer features similar to HMO and POS plans and encourage use of a primary care physician to direct care.

Preferred Provider Organization (PPO)

PPO plans are available on both an insured and a self-funded (ASO) basis. PPO Plans offer the freedom to visit any licensed provider. A customer does not have to choose a primary care physician (PCP) or obtain a referral to see a specialist.

Open Access Plus (OAP)

OAP plans are available on both an insured and a self-funded (ASO) basis. Although optional, customers are encouraged to choose a Primary Care Physician (PCP) to be their health advocate and integrator of care. OAP is a self-directed product with a national seamless network. In Texas, Open Access Plus plans are considered Preferred Provider plans with certain managed care features.

Open Access Plus In-Network (OAPIN)

OAPIN plans are available only on a self-funded (ASO) basis. OAPIN is a national seamless product with competitive discounts. OAPIN plans offer features similar to the Open Access Plus plan without an out-of-network option for non-emergency care.

LocalPlus

LocalPlus plans are available both on an insured and a self-funded (ASO) basis. Although optional, customers are encouraged to choose a Primary Care Physician (PCP) to be their health advocate and integrator of care. LocalPlus is a self-directed product with a national network, but with a restricted network in certain service areas. In Texas, LocalPlus plans are considered Preferred Provider plans with certain managed care features.

LocalPlus IN

LocalPlus IN plans are available only on a self-funded (ASO) basis. LocalPlus IN offers a national network, but with a restricted network in certain service areas. LocalPlus IN plans offer features similar to the LocalPlus plan without an out-of-network option for non-emergency care.

Indemnity Plans

Indemnity plans are available on both an insured and a self-funded (ASO) basis. Indemnity plans offer customers the flexibility to visit any doctor and choose hospitals and health care facilities.

Voluntary, Limited Benefit Plans (Starbridge® and Fundamental Care)

Voluntary, Limited Benefit Plans are available on an insured basis. Cigna's Limited-Benefit Health Plans are designed to give access to affordable benefits for everyday medical care, but they are not comprehensive plans. These plans help to cover doctor visits, wellness, prescriptions, and much more.

If you are offered a Cigna plan through your employer and would like a better understanding of the benefit plan(s) offered to you, look for general descriptions in our Products and Services section.

Dental Plans
General Information

In Texas, we offer a variety of dental plans, on an insured or self-funded (ASO) basis. Examples of the types of dental plans available to Texas residents include, but are not limited to:

Dental Health Maintenance Organization (DHMO)

DHMO plans are available on a pre-paid basis only. DHMO plans offer access to quality dental care from a broad network of participating network dentists and specialists. During enrollment, customers must choose a Network General Dentist (NGD) who may provide routine care, coordinate care and provide referrals to in-network specialists. Customers must visit their network general dentist or specialist in order for the benefit amounts on their patient charge schedule to apply. A Cigna Dental Care (DHMO) network dentist is a licensed dentist who has signed an agreement with Cigna Dental to provide customers with general dentistry or specialty care services.

Dental Preferred Provider Organization (DPPO)

DPPO plans are available only on a self-funded (ASO) basis. DPPO Plans offer customers the freedom to visit any dentist or specialist. However, when customers receive dental care from a dentist or specialist who does not participate in the DPPO network, their out-of-pocket expenses will generally be higher. A customer does not need to choose a Network General Dentist (NGD) to receive care or need a referral to see a specialist.

Cigna Dental Choice

Cigna Dental Choice plans are available on both an insured and a self-funded (ASO) basis. Cigna Dental Choice Plans offer customers the freedom to visit any dentist or specialist. The plan deductible, copayment, or coinsurance is the same for covered dental care whether the dentist or specialist participates in the Dental Choice network or not. However, a customer's out-of-pocket expenses will generally be lower when receiving dental care from a participating dentist or specialist because participating dentists or specialists have agreed to a negotiated rate which is usually lower than their billed charges. A customer does not need to choose a Network General Dentist (NGD) to receive care or need a referral to see a specialist.

Dental Exclusive Provider Organization (DEPO)

DEPO plans are available only on a self-funded (ASO) ERISA basis. DEPO Plans offer access to quality dental care from a broad network of participating network dentists and specialists. This plan does not cover services performed by a general dentist or specialist who does not participate in the network. A customer does not need to choose a Network General Dentist (NGD) to receive care or need a referral to see a specialist.

Cigna Traditional (Dental Indemnity)

Dental Indemnity plans are available on both an insured and a self-funded (ASO) basis. Customers and their covered family customers can access dental care from any general dentist or specialist. Customers do not need to select a Network General Dentist (NGD) to receive care or need a referral to receive care from a specialist.

Cigna Dental Oral Health Integration Program®

Cigna Dental customers with certain medical conditions may be eligible for full reimbursement of their out-of-pocket charges for specific dental procedures. Medical conditions that qualify for dental reimbursement include: diabetes, heart disease, stroke, maternity, head and neck cancer radiation, organ transplants, and chronic kidney disease. Please review your plan materials for a list of reimbursable dental procedures and more program details.

Health Related & Non-Insured Services
Health Related and Non-Insured Services

Cigna health benefit plans provide access to preventive care, health education and other forms of health related programs. Through our local and national wellness programs, customers can receive information and support that can help them learn how to stay fit and enjoy healthier lives. We encourage our customers to take advantage of these important wellness programs.

Current programs include:

  • Cigna HealthCare Healthy Rewards. This program offers discounts on health and wellness programs and services. There are no added membership fees for the Healthy Rewards discount program. Cigna HealthCare customers and their covered family members are already qualified. Examples of services available through the program include discounts on products and services from health clubs, weight management systems, Lasik vision correction and magazine subscriptions. Please contact Customers Services using the number on your ID card to learn which Healthy Rewards programs are available in Texas.
  • Cigna HealthCare 24-hour Health Information LineSM. We have a toll-free telephone line staffed with trained nurses who can answer questions, help direct members to the nearest Cigna HealthCare participating provider and help process urgent care referrals when necessary. Additionally, through this toll-free number, callers can access a Health Information Library of audio tapes on more than 1,000 health conditions and topics.
  • Cigna Well Aware for Better Health® programs offer help for these chronic conditions:
    • Asthma
    • Diabetes
    • Heart disease
    • Low back pain
    • Depression
    • Weight complications
    • Chronic Obstructive Pulmonary Disease
    • Targeted conditions*
    Each program allows you to design a personalized action plan under your doctor's guidance. We'll provide your doctor with confidential updates on your progress and challenges, and we'll provide you with:
    • access to a personal, experienced registered nurse to call for guidance and support
    • educational material about your condition
    • self-care information
    • reminders of important tests and exams
    • informational newsletters

    *These conditions include acid-related stomach disorders, atrial fibrillation, decubitus ulcer, fibromyalgia, hepatitis C, inflammatory bowel disease, irritable bowel syndrome, osteoarthritis, osteoporosis and urinary incontinence. Availability of the Well Aware program depends on your benefit program. Please check with your benefit manager.

  • Cigna HealthCare Healthy Babies® program. This program encourages prenatal care and provides important information and resources for parents-to-be. We supply valuable education materials from the March of Dimes® including Mama Magazine and other brochures about pregnancy. One of the many ways we emphasize early and regular access to proper prenatal care is by eliminating copayments for OB office visits after the initial visit.
Frequently Asked Questions
How can I be sure that health plans in Texas match quality standards to those in other states?

Cigna HealthCare is committed to quality and to making information about health care quality, including our own performance, available to consumers and customers.

We are pleased that Cigna HealthCare of Texas, Inc. has ranked among the top 200 of "America's Best Health Plans", in U.S. News and World Report for three consecutive years (2006, 2007 and 2008) demonstrating our commitment to quality care and service is yielding strong results. This ranking recognizes our strong performance on clinical quality measures and NCQA accreditation record.

NCQA Accreditation is viewed in the health care industry as a highly rigorous and regarded health plan accreditation program in the health care industry. For an organization to become accredited by NCQA, it must undergo a detailed survey and meet certain standards designed to evaluate the health plan's clinical and administrative systems. NCQA pays special attention to the areas of patient safety, confidentiality, consumer protection, access, service and continuous improvement.

Cigna HealthCare of Texas, Inc. which is currently accredited by NCQA, holds the highest designation rating offered of "Excellent" for its commercial HMO/POS products through February 2010). Cigna HealthCare of Texas also earned "Distinction" status from NCQA for its consumer decision support tools through its Quality Plus Member Connections Program for that same time period.

Cigna HealthCare has been publicly reporting our HEDIS®* quality results for about a decade. We believe consumers should have access to this type of publicly-available information. Cigna HealthCare of Texas Effectiveness of Care results have consistently year over year exceeded the Quality Compass National average and/or demonstrated significant/meaningful improvements in several measures.

The Consumer Assessment of Health Providers and Systems (CAHPS®*) annually evaluates health plan performance in areas such as customer service, access to care and claims processing. Cigna HealthCare of Texas results also continue to show year over year positive trends in several measures 2005 through 2008.

 

*Healthcare Effectiveness Data and Information Set (HEDIS®) is a registered trademark of NCQA. CAHPS® is a registered trademark of the Agency for Healthcare Research and Quality (AHRQ)

Who is eligible for the Texas Health Insurance Risk Pool?

The following is a list of criteria that may deem a terminated member eligible for the Risk Pool:

  1. The member must be a resident of Texas and apply for health coverage.
  2. The member must have a written refusal or rejection, based on health reasons, by a health carrier, for substantially similar individual hospital, medical, or surgical coverage.
  3. The member must have a certification from an agent or salaried representative of a health carrier on the Health Insurance Risk Pool's certification form, stating that the agent or salaried representative is unable to obtain substantially similar individual hospital, medical, or surgical coverage for the member from a health carrier the agent or salaried representative represents because, based on that health carrier's underwriting guidelines, the member will be declined for coverage as a result of a medical condition.
  4. The member must have an offer of substantially similar individual hospital, medical, or surgical coverage with riders excluding certain health conditions the member has (for example, a health carrier will provide coverage to the member with an exclusion of coverage for member's diabetes, heart disease, cancer, etc.).
  5. The member must have a diagnosis of one of the medical conditions specified by the Texas Health Pool Board of Directors.
  6. The member must have proof that health coverage has been maintained for the previous 18 months with no gap in coverage greater than 63 days, with the most recent coverage with an employer-sponsored plan, government plan or church plan.

For additional information concerning eligibility, coverage, cost, limitations, exclusions, and termination provisions call or write:

Texas Health Insurance Risk Pool
P. O. Box 6089
Abilene, TX 79608-6089
1.888.398.3927

Visit the Texas Health Insurance Risk Pool web site: www.txhealthpool.com

Are hospital based providers (radiologist; anesthesiologist; pathologist; emergency department physician; or neonatologist) considered to be in-network providers?

Some hospital based providers are contracted with Cigna and are considered to be in-network providers. However, not all hospital based providers contract with Cigna. Although health care services may be or have been provided to you at a health care facility that is a member of the provider network used by your health benefit plan, other professional services may be or have been provided at or through the facility by physicians and other health care practitioners who are not members of that network. You may be responsible for payment of all or part of the fees for those professional services that are not paid or covered by your health benefit plan.

Does Cigna provide coverage for acquired brain injuries?

Most Cigna insured health benefit plans include coverage for an acquired brain injury, including the following services:

  1. cognitive rehabilitation therapy;
  2. cognitive communication therapy;
  3. neurocognitive therapy and rehabilitation;
  4. neurobehavioral, neurophysiological, neuropsychological and psychophysiological testing and treatment;
  5. neurofeedback therapy and remediation;
  6. post acute transition services and community reintegration services, including outpatient day treatment services or other post acute care treatment services; and
  7. reasonable expenses related to periodic reevaluation of the care of an individual covered under the plan who has incurred an acquired brain injury, has been unresponsive to treatment, and becomes responsive to treatment at a later date, at which time the cognitive rehabilitation services would be a covered benefit.

The fact that acquired brain injury does not result in hospitalization or acute care treatment does not affect the right of the insured or the enrollee to receive the preceding treatments or services commensurate with their condition. Post acute care treatment or services may be obtained in any facility where such services may be legally provided, including acute or post acute rehabilitation hospitals and assisted living facilities regulated under the Texas Health and Safety code.

You should refer to your insurance certificate or Group Service Agreement for detailed coverage information.

Does Cigna provide coverage for prostate cancer screening?

Most Cigna insured health benefit plans include coverage for each covered male for an annual medically recognized diagnostic examination for the detection of prostate cancer. Benefits include:

  1. a physical examination for the detection of prostate cancer; and
  2. a prostate-specific antigen test for each covered male who is
    1. at least 50 years of age; or
    2. at least 40 years of age with a family history of prostate cancer or other prostate cancer risk factor.

You should refer to your insurance certificate or Group Service Agreement for detailed coverage information.

Does Cigna provide coverage for tests for detection of colorectal cancer?

Most Cigna insured health benefit plans include coverage for each person enrolled in the plan who is 50 years of age or older and at normal risk for developing colon cancer. Covered expenses incurred in conducting a medically recognized screening examination for the detection of colorectal cancer include the covered person's choice of:

  1. a fecal occult blood test performed annually and a flexible sigmoidoscopy performed every five years, or
  2. a colonoscopy performed every 10 years.

You should refer to your insurance certificate or Group Service Agreement for detailed coverage information.

Does Cigna provide coverage for tests for detection of human papillomavirus and cervical cancer?

Most Cigna insured health benefit plans include coverage for each woman enrolled in the plan who is 18 years of age or older, for expenses incurred for an annual medically recognized diagnostic examination for the early detection of cervical cancer. Coverage includes, at a minimum, a conventional Pap smear screening or a screening using liquid-based cytology methods, as approved by the United States Food and Drug Administration, alone or in combination with a test approved by the United States Food and Drug Administration for the detection of the human papillomavirus. You should refer to your insurance certificate or GSA for detailed coverage information

Isn't Cigna a March of Dimes Sponsor?

Yes. We proudly support the nationwide affiliation and long-time involvement Cigna HealthCare has with the March of Dimes®. Since 1995, Cigna HealthCare has been the exclusive National Health Care Sponsor of the March of Dimes March for Babies. www.marchofdimes.com

What is Cigna's Policy on Telehealth Services?

Telehealth Basics:

You have access to certain health care services without leaving your home or office by taking advantage of the telehealth benefits in your Cigna health benefits plan. Receiving telehealth services can help you get the care you need for a wide range of minor acute conditions, including:

  • Sore throat
  • Headache
  • Stomachache
  • Fever
  • Cold and flu
  • Allergies
  • Rash
  • Acne
  • UTI and more

How we process your telehealth claim:

Under the Texas Telehealth mandate, insured medical policies are required to offer benefits for covered medical services provided via telehealth services. Cigna will process your telehealth service claim based on your plan provisions. As a general rule, telehealth services are offered under your benefit plan just like any other covered face-to-face visit with a doctor, and they are processed according to the network status of the physician administering those services. To find out whether a certain service is a covered benefit under your health plan, please see your official plan documents.

Product Disclosures
General Information

IMPORTANT NOTICE:

 

Please note that the products and services described on Cigna's websites may not be applicable to you or available to you under your employer’s plan. Please refer to your plan documents for information that is applicable to your specific plan.

 

If you are offered a Cigna plan through your employer and are a plan member or customer, or planning to become a plan member or customer, we recommend reading any disclosure that’s applicable to you so that you can become more familiar with your plan and any state-specific mandates. If you are considering becoming a plan member or customer and have questions about your plan coverage, please contact your employer.

 

While reviewing the information on this page, it’s important to note:

  • The disclosures provided here are general and your plan documents may contain additional disclosures which are required by your state and/or specific to your plan. The disclosures in your plan documents take precedence.
  • Certain mandates may only apply to certain plan types.
  • State mandates may not apply to employer-funded (or self-funded) plans. Please contact your employer if you need to know whether your plan is self-funded and whether any state mandates apply to your plan.
Exclusions and Limitations

All plans and insurance policies have exclusions, limitations, reduction of benefits and terms under which the plan or policy may be continued in force or discontinued.  Rates may vary based on plan design, age, gender and geographic factors. For a complete list of both covered and not covered services under your plan or policy, including benefits required by your state, see your evidence of coverage, insurance certificate, group service agreement or summary plan description.

Discount Programs

CignaPlus Savings

  • CignaPlus Savings is a dental discount program that provides customers access to discounted fees, pursuant to schedules negotiated by Cigna Dental with participating providers, which customers are responsible for paying in full, directly to participating providers. Although all participating providers go through a credentialing process to assure that they are appropriately licensed and qualified, Cigna Dental does not otherwise guarantee nor is it responsible for the quality of any services or products purchased by customers. Customers have the right to cancel within thirty (30) calendar days of enrolling in the program. For more information, please call or write the company:

    Cigna Dental
    Attn: Operations
    1571 Sawgrass Corporate Parkway, Suite 140
    Sunrise, FL 33323
    Telephone: 1.877.521.0244

Healthy Rewards

  • This program offers discounts on health and wellness programs and services. If your Cigna plan includes coverage for any of these services, this program is in addition to, not instead of, your plan benefits. Healthy Rewards programs are separate from your medical benefits. A discount program is NOT insurance, and the customer must pay the entire discounted charge.
Health Reimbursement Account (HRA) Plan Option

HRA's can only be chosen together with certain plan types. Your HRA is self-funded by your employer, who is solely responsible for contributing the funds used to pay benefits under your plan using the funds in your HRA. You are not required to make any contribution to the HRA account, either pursuant to a salary deduction election or otherwise under a Section 125 cafeteria plan (except that contributions are required from those under COBRA continuation coverage). You may not enroll under this option if you are considered self-employed (including partners and more-than-2% shareholders in a subchapter S corporation).

Health Savings Account (HSA) Pre-enrollment Statements

WARNING: You cannot open an HSA if, in addition to coverage under an HSA-qualified High Deductible Health Plan ("HDHP"), you are also covered under a Health Flexible Spending Account (FSA) or an HRA or any other health coverage that is not a HDHP.

 

If you have elected to enroll in an HSA plan, you expressed your interest in opening a Health Savings Account with JPMorgan Chase Bank (Mellon Trust of New England, N.A. for GWH-Cigna Customers), an HSA service provider, or any other successor HSA service provider (hereafter "the HSA Service Provider"). The HSA Service Provider will contact you and provide you with an HSA enrollment form, a signature card, a request for information for any Customer Identification Program compliance and other related materials necessary to open an HSA account with the HSA Service Provider. In order to open an HSA with the HSA Service Provider, you must:

  1. In a timely manner, complete, sign and submit all the forms required by the HSA Service Provider; and
  2. Be found to meet all of the requirements prescribed by the HSA Service Provider.

However, if your employer has not selected JPMorgan Chase Bank (Mellon Trust of New England, N.A. for GWH-Cigna Customers) as the HSA service provider, you may open the HSA with an HSA custodian/trustee that is either arranged by your employer or that you personally select. You must agree to complete necessary forms and meet the requirements set forth by the HSA custodian/trustee pertaining to the establishment and operation of your HSA.

 

With respect to an HSA opened pursuant to this arrangement, the HSA trustee/custodian will be solely responsible for all HSA services, transactions and activities related thereto. Neither your employer nor Cigna is responsible for any aspects of the HSA services, administration and operation.

 

Prior to enrollment, you must certify that you have enrolled or plan to enroll under a HDHP and are not covered under any other health coverage that is not a HDHP.

Cigna Mobile

While accessing Cigna.com or myCigna.com remotely through Cigna Mobile, standard mobile phone carrier and data usage charges will apply. Cigna’s mobile web solution is available to any current Cigna customer who has been provided user access to myCigna.com, which includes the personalized Health Care Provider (HCP) directory, contact info, and prescription drug price quote tool (if your plan includes prescription drug coverage through Cigna). Cigna’s mobile HCP directory is also available at www.Cigna.com. The listing of a HCP in the mobile directories available at myCigna.com and Cigna.com does not guarantee that the services rendered by that professional are covered under your specific medical plan. Check your official plan documents, or call the number listed on your ID card, for information about the services covered under your plan benefits. Cigna Mobile currently is not available for GWH-Cigna Customers.

Disclosure of Financial Arrangements

Compensation to Third Parties

Compensation is paid to third party brokers and insurance sales people for placing a Client's ("Client" refers to employers or other groups sponsoring a health benefit plan) insurance coverage and/or plan administration contract with Cigna. This compensation is typically in the form of a percentage of premiums collected in the case of insurance policies, or a fixed, per-employee per-month rate (in the case of self-funded plans).

Additional compensation may be paid to brokers and insurance sales people based on persistency or other non-case-specific factors, sometimes referred to as "contingent commissions." This additional compensation is not part of the regular commissions.

Reports are sent to its employer policyholders and contract-holders regarding the commission and contingent commissions paid to brokers or insurance sales people for their use in preparing their Annual Return and report (Form 5500) where required under federal law (ERISA). Upon request, we will also disclose how the Client may receive more information directly from the broker or sales person regarding compensation arrangements.

Primary Source of Revenue

The primary compensation received with respect to insurance policies is the policyholder paid insurance premium. The primary source of revenue in connection with administrative services contracts is the service fees paid by the self-insured plan sponsor and/or the plan.

Other Revenue Sources

We negotiate for additional revenue from some third party vendors. We negotiate the additional revenue as part of the overall structure of each vendor agreement. The nature of negotiated contracts with vendors is that they are generally based on the aggregation of all business related to the contract and are not Client-specific.

Cigna retains this additional revenue for its sole and exclusive use, applying it in part to the overall cost of maintaining Client programs and other business expenses. The aggregate revenue generated from the third party vendors, including programs designed to generate cost savings for the Client, allows Cigna to cover the cost of client programs and other business expenses and to offer lower premiums and administrative fees to its Clients.

Cigna may offer programs and services where a third party vendor supplies all or part of the program or services. The claim amount charged to the Client for the program or services includes both an amount to cover the vendor fees and an amount for Cigna’s related and other expenses. The disease management program is an example of a vendor program where the Client may be charged more than the amount charged by the vendor for the program.

Another example can be found in the rates for pharmacy benefits negotiated with a pharmacy benefit manager (PBM). The rates charged to a Client are typically expressed as a percentage discount from average wholesale price. Cigna may offer lower discounts to the Client than the discounts that Cigna is offered by the PBM. Cigna may obtain or retain all or a portion of drug manufacturer revenue that it receives from the PBM or directly from the drug manufacturer. This revenue may be based on factors including membership volume, volume of drug usage or placement of a drug on the formulary. Cigna’s drug formulary changes occasionally based on clinical efficacy, net drug cost and market share considerations. Customer reimbursements will differ depending on where the drug falls in the formulary. Changes to the formulary can impact the revenue paid by drug manufacturers to Cigna or the PBM.

Cigna may also receive transition fees when it changes third party vendors. These fees are paid to Cigna by the vendor to cover implementation and related expenses such as staffing or administrative changes that Cigna incurs during the transition. Cigna may receive marketing fees or commissions from vendors for placing the business with the vendor. These may be calculated on a per-member per-month (PMPM) basis, flat rate, or on a percentage basis. Cigna may receive other compensation from its third party vendors. For example, Cigna may receive payment for the development and installation of special computer systems or programs necessary for Cigna to deliver a particular service to its Clients.

Cigna may receive performance guarantee payments if a vendor does not meet performance targets.

Cigna uses a specialized vendor to negotiate discounts for large out-of-network (OON) claims. When a large out of network claim is received, the vendor will negotiate with the provider to obtain a lower rate, or discount, to the charges. The amount for the claim charged to our Client will reflect the discounted charges and an administrative fee will be charged for providing the savings program. Similar savings programs are in place for secondary networks and to audit large, complex hospital claims.

When a third party should have been responsible for the claims incurred by a customer (as a result of an automobile accident, for example), after paying the claim, Cigna may try to obtain reimbursement from the third party source. Cigna currently pursues reimbursement using a specialized subrogation vendor. For successful efforts, a percentage of the recovery is retained by Cigna. Additionally, Cigna has priority right to reimbursement of any stop loss payments. Any excess is credited to the Client.

In most situations, Cigna processes claims directly and the claim amount collected by Cigna from the Client equals the amount paid to the provider. Where a third party manages a particular type of medical service, a portion of the claim amount paid to the third party may in turn be paid to Cigna by the third party to cover Cigna's costs of administration and other business costs. A Customer's coinsurance, deductible and lifetime maximum are calculated based on the entire claim amount including the portion retained by Cigna to cover costs.

Certain Cigna companies directly provide or arrange for the provision of covered heath care services including, but not limited to Cigna Behavioral Health, Inc. Their charges for providing or arranging for these services are reimbursed as claims.