Cigna 2012 Annual Report Download - page 25

PART I
ITEM 1 Business
insured and self-insured medical, dental, behavioral health, vision, Financial information, including premiums and fees, is presented in
and prescription drug benefit plans, health advocacy programs and the Global Health Care section of the MD&A beginning on page 41
other products and services that may be integrated to provide and in Note 23 to Cigna’s Consolidated Financial Statements
comprehensive global health care benefit programs to employers beginning on page 119 of this Form 10-K.
and their employees, including globally mobile individuals. Cigna,
either directly or through its partners, offers some or all of these
Health Plans
products and services in all 50 states, the District of Columbia, the
U.S. Virgin Islands, Canada, Europe, the Middle East, and Asia.
Commercial Medical – U.S. and International
Cigna services its globally mobile customers virtually everywhere in
Managed Care Plans. Global Health Care offers a broad product line
the world. These products and services are offered through a variety
of managed care benefit plans that use meaningful coinsurance and
of funding arrangements such as administrative services only (ASO),
copayment differences to encourage the use of ‘‘in-network’’ versus
guaranteed cost and retrospectively experience rated.
‘‘out-of-network’’ health care providers and the use of primary care
The Government operating segment offers Medicare Advantage physicians. While these products offer access to a broad national
plans to seniors in 13 states and the District of Columbia, Medicare network of ‘‘in-network’’ health care providers (that is somewhat
Part D plans in all 50 states and the District of Columbia and smaller than the network used with the preferred provider (‘‘PPO’’)
Medicaid plans. plan product line), employers may elect to utilize a subset of Cigna’s
network to better manage costs and quality.
Global Health Care seeks to differentiate itself by providing superior
customer insights, care delivery, product integration and unique Preferred Provider Plans. Global Health Care also offers an open
product offerings. Global Health Care expects to accomplish these access product line that features a network with even broader access
goals by deepening its reach in selected geographies and market than the Managed Care Plans with no option to designate a primary
segments as well as accelerating its engagement with preferred health care physician, in-network and out-of-network coverage, and may
care professionals. For its globally mobile customers, Global Health be at a somewhat higher medical cost.
Care’s strategic advantages include unique health care solutions,
Choice Fund suite of Consumer-Driven Products. In connection with
seamless worldwide care delivery and superior customer service.
many of the health care products described above, Global Health
With the exception of Health Maintenance Organization (‘‘HMO’’), Care offers the Cigna Choice Fund suite of consumer-driven
Medicare, Medicaid and stop loss products, each of Global Health products, including Health Reimbursement Accounts (‘‘HRA’’),
Care’s group health benefit products are offered with alternative Health Savings Accounts (‘‘HSA’’) and Flexible Spending Accounts
funding options (i.e.: administrative services only (‘‘ASO’’ or (‘‘FSA’’). These plans can be used to pay medical care expenses not
‘‘self-insured’’), insured experience rated, and insured guaranteed covered by a base medical plan and are designed to encourage
cost). These funding options are further described on page 5 of this customers to understand and manage their health and health
Form 10-K. Approximately 86% of the Company’s commercial benefits.
medical customers are enrolled in self-insured and experience-rated
Cigna’s Choice Fund HRA is funded by employer
plans, where lower costs of providing health care directly benefit our
contributions and is often combined with a high deductible
corporate clients and their employees, with the remainder being
plan. HRA dollars can be rolled over from year-to-year at
insured under guaranteed cost plans.
the plan sponsors’ discretion.
HSA plans combine a high deductible health plan with a
Principal Products and Services
tax-advantaged savings account funded by customer
Cigna’s principal health care products (discussed below) include: contributions that offers mutual fund investment options.
Funds in an HSA can be used to pay the deductible and
Health Plans – group and individual medical coverage:
other IRS-approved health care expenses. The health
Commercial Medical: U.S. and International – medical plans savings account is portable and unused funds accumulate
covering domestic-based employees and, for certain from year to year.
multinational employers, their globally mobile employees. In
An FSA allows customers to pay for IRS-approved health
order to engage customers in their health care choices, consumer-
care expenses with pre-tax employee contributions. Unused
driven core medical plans are often combined with the Cigna
funds in an FSA do not accumulate from year to year, but
Choice Fund suite of accounts.
are forfeited by the employee.
Government – Medicare Advantage, Medicare Part D and
Stop Loss Coverage. Global Health Care offers stop loss insurance
Medicaid plans sold to Medicare or Medicaid-eligible individuals
coverage for self-insured plans. This stop loss coverage reimburses
(primarily seniors).
the plan for claims in excess of a predetermined amount, for
Specialty Products – products and services that improve quality, lower individuals (‘‘specific’’), the entire group (‘‘aggregate’’), or both.
the cost of medical services and help customers achieve better health Global Health Care also includes stop loss features in its experience-
outcomes. These products can be sold on a standalone basis but are rated policies (discussed below).
most effective when integrated with a Cigna-administered health
plan.
CIGNA CORPORATION - 2012 Form 10-K 3
•
•
•
•
1.
2.
•
•
3.
•
•
•