New contract expected to save the City $600 million annually
The City of New York Office of Labor Relations announced today the award of a Medicare Advantage contract for City retirees to Aetna®, a CVS Health® company (NYSE: CVS). The plan is being offered to approximately 250,000 retirees and their eligible dependents age 65 and over.
“With today’s historic award by the City of New York Office of Labor Relations, we’ll offer a customized Medicare Advantage plan that provides high-quality, affordable and convenient health care for City of New York retirees who’ve devoted their careers to serving New Yorkers,” said Dan Finke, Executive Vice President, CVS Health, and President, Aetna. “With nearly 60 years of Medicare expertise and experience, we stand ready to serve retirees through our network of primary care and specialty physicians, mental health providers and hospitals they know and trust.”
The contract is valued at more than $15 billion over the initial five years and four months term of the agreement. The move from traditional fee-for-service Medicare to a Medicare Advantage plan is expected to save the City potentially $600 million annually.
“We’ll continue to build a strong partnership with the City of New York and the Municipal Labor Committee, which were and will remain instrumental in helping engage retirees in their health care,” added Rick Frommeyer, Senior Vice President, Aetna Group Retiree Solutions. “We’ve already proactively collaborated on multiple ways to educate retirees about our Medicare Advantage plan benefits and to help ensure a smooth transition on September 1, 2023. We look forward to meeting retirees at one of our many upcoming open enrollment meetings.”
The five-year initial service period for the contract begins September 1, 2023, through December 31, 2028, with the option to renew for three, two-year terms. Additionally, at the end of the third two-year renewable option period, the contract becomes renewable by mutual agreement for two-year terms in perpetuity.
Media contactEthan Slavin