Oscar and Cigna Partnership to Offer Health Coverage for Small Businesses

Earlier this spring, insurance companies Cigna Corp., based in Bloomingfield, Connecticut, and Oscar Health Inc., based in New York, announced “Cigna Administered by Oscar“, a collaboration to offer small group health insurance in several states. Later this summer, Louis DeStefano,head of the small group business and senior vice president of growth at Oscar said the Cigna Oscar partnership provided both companies with the opportunity to combine their respective strengths to benefit consumers.

How to reach prospective clients, a challenge for insurers

Healthcare in America changed the moment that the Affordable Care Act was signed into law, but private healthcare plans will still be purchased even if coverage is being offered as part of employment. This means that for private insurers, there will still be a huge population of prospective clients, there is just the question of how best to reach more of them. The COVID-19 pandemic had a great impact on the whole healthcare system, including health insurances. A report released by the California health insurance marketplace indicated that the cost of COVID-19 care and treatment could be as high as $250 billion. As a result, health insurance premiums could increase by as much as 40%. This, of course, would prove hard to swallow especially for the small businesses. 

Affordable, predictable, and simple health coverage to small businesses

In a press release, Bruce Grimm, senior vice president of segments at Cigna, said that “this pandemic has forced small business owners in Arizona to make many sacrifices, especially when it comes to their health care choices. As more workplaces reopen, maintaining a safe workplace is vital to helping employees have peace of mind. Through our partnership with Oscar, we are providing more choices for affordable, predictable, and simple health coverage to small businesses at a time when they need it most.”

Cigna and Oscar Health, the first health insurance company built on a full-stack technology platform, announced that Cigna Administered by Oscar^1] small group health insurance will be available to Arizona employers across Apache, Cochise, Coconino, Gila, Graham, Greenlee, La Paz, Maricopa, Mohave, Navajo, Pima, Pinal, Santa Cruz, Yavapai, and Yuma counties starting July 1, 2021.

As part of the arrangement, the two insurers have agreed to “share risk equally under a reinsurance agreement for solutions” offered through the partnership. 

Currently, this project is operating in Tennessee, the Atlanta metro area, 14 counties in California, and will go live on July 1 in both Connecticut and Arizona.

Small businesses are being helped to get back on their feet

Later this summer, Louis DeStefano, head of the small group business and senior vice president of growth at Oscar, said the partnership provides both payers with the opportunity to combine their respective strengths to benefit consumers.

“As the country begins to reopen, it is critical that small businesses are being helped to get back on their feet and keep their doors open,” said Louis DeStefano. “Cigna Administered by Oscar specifically meets those needs by offering small businesses affordable health plans that meet the needs of their employees, in this moment and moving forward.”

Arizona small businesses with between one and 50 employees^[2] will have access to unique services driven by the combination of Cigna’s provider relationships and Oscar’s consumer-centric, tech-driven approach to customer service and care navigation, including:

• Expected monthly savings for businesses and their employees.
  • Range of plan options across price points to meet the needs of every employee.
  • Behavioral health benefits to help keep teams productive and healthy.
• Local and nationwide networks of quality doctors, hospitals, and specialists.
  • Access to Cigna’s behavioral health network for mental health resources.
  • Cigna Open Access Plus network, a national network of quality, cost-effective providers.
  • Cigna LocalPlus®, a locally designed network of quality providers offering quality, cost-effective medical care.
  • 24/7 virtual urgent care to support employees wherever they are located, at $0 cost.
• Affordable and easy-to-access pharmacy services.
  • $3 co-pays on the most commonly prescribed prescriptions.
  • Express Scripts pharmacists, nurses, and specialty drug experts.
• Dedicated care team experts to help employees understand their benefits, find nearby care and get the most value out of their plan.

A differentiated product to cater to the needs of employers

The COVID-19 pandemic has resulted in an unprecedented disruption in the U.S. healthcare system. Given the pandemic’s substantial impact on the economy, especially for small businesses, DeStefano said that it is important for Oscar to offer employers a differentiated product compared to other payers. He added that Oscar’s offerings, coupled with Cigna’s efforts, meet the needs of employers related to price point, plan design, and customer experience.

“One thing that we’re seeing are employers based in major metro areas have employees living everywhere due to the pandemic, so whether that’s a permanent or temporary solution, having that national breadth of access is extremely critical,” DeStefano. “Where Oscar comes is in is bringing that member experience, telemedicine care routing, and tech-driven, member-centric engagement approach for a small employer while also hitting the price point that employers need.”

Shared risks and profits with plans to expand in the future

Cigna and Oscar have agreed to share risk equally under a reinsurance agreement for solutions offered through this strategic partnership and plan to expand the partnership over time. 

Looking forward, DeStefano said that Oscar is evaluating opportunities to expand the partnership’s offerings to non-medical products with the hopes of approaching employers with a “more well-rounded full employee benefits package.”

There are many reasons why innovation still continues to be an illusive dream for many executives in the healthcare industry, the first one being they are too afraid to fail to even try new approaches. In this case, Cigna and Oscar are proving it pays off to be brave.