Local officials are worried enough about saving 700 jobs at the Visalia Cigna call center that they traveled to Washington last week to urge lawmakers support special legislation.
Visalia City Manager Mike Olmos, Councilman Bob Link, Tulare County Supervisor Steve Worthley and others bent the ears of California Senators Barbara Boxer and Dianne Feinstein to support a waiver of rules under the Affordable Care Act.
The waiver is sought for large insurance companies including Cigna that have a sizable expatriate customer base overseas now impacted by the Affordable Care Act. The health care law requires certain mandates that their foreign competitors don’t have to comply with. The waiver would affect plans that cover people working outside their home country, including foreign employees working in America and Americans working abroad.
Cigna says they have about one million Americans who work overseas and get their care there that will be subject to rules like free preventive care that foreign-based insurance plans don’t have to offer. That puts U.S.-based insurance firms at a competitive disadvantage, they argue.
Cigna has told government officials that if the rule is not waived they will have to close several offices that serve expats including the one in Visalia and another in Delaware affecting 500 workers. They said they may even relocate their corporate office overseas if need be.
While Cigna officials did not return a call requesting comment, Visalia City Manager Mike Olmos said the city is doing what it can to help the company remain in Visalia.
“We know enough about the situation that the local facility would be significantly impacted because of lot of those policies are issued here,” Olmos said. “Our concern is protecting those 700 jobs.”
He said the issue of expat coverage has been simmering since the implementation of the ACA, but momentum now is such that Cigna wants to take action.
“It’s going to require legislation that will provide relief on applying all the ACA requirements to expat policies,” Olmos said. “If that’s not done, there is a strong potential that that service [Cigna provides] would be moved overseas.”
Olmos said the trip last week was the second he has made to meet with Congressman Devin Nunes and others to seek a solution to Cigna’s problem. Others from the city, as well as from the Tulare County Associatioan of Governments, have also traveled to D.C. seeking a solution. He said they used the time last week to meet with others from the Delaware delegation, and Senators Boxer and Feinstein, to express to them that a fix was needed.
The outcome over the past several months has been that Nunes and Delaware Rep. John Carney, a Democrat, jointly authored legislation to “make the fix,” as Olmos put it. The bi-partisan bill has cleared the House and is now on the floor of the Senate.
“There is no doubt that without the waiver we will not be able to save some 700 jobs in Visalia” says Steve Worthley who adds that he is nevertheless optimistic that the visit to Washington may have paid off.
Making the job more difficult is a requirement that the legislation be supported by “unanimous consent” Worthley said. “That’s a tall order with this congress.”
Congress is on its summer break this month and won’t return until Sept. 5.
While Democrats appear to favor a targeted waiver of rules for overseas workers, they want to tailor the rule and not allow some loophole that would gut the health care law for U.S. residents.
“A lot of work has been done to provide support to Cigna, but if these policies don’t match, common sense would tell you that the law should be changed to allow those policies to be issued,” Olmos said. “Time clearly is of the essence. They are trying to move as quickly as they can to best compete in the marketplace. Their hope is to get this done as soon as possible. It’s important to them in order to stay competitive.”
Cigna in Visalia
Cigna is one of Visalia’s largest private employers with employment thought to be between 600 to 700. The insurance powerhouse once had as many as 1,400 employees here when it added 300 jobs in 2001 and built their headquarters on Akers Road. The company has had some presence in Visalia since around 1991. Some still work in the Akers building, but the 150,000-square-foot office has been sold and divided up since Cigna requires only about 50,000 sq. ft.
The current call center operation takes calls for overseas clients that include expatriate members.
Ironically, Cigna reported financial results recently that indicated it is doing well under the ACA with a surge of new young customers. Cigna reported second-quarter 2014 net operating earnings of $1.96 per share, beating the Zacks Consensus Estimate of $1.85. Earnings were also up 10.1 percent year over year. Cigna’s better-than-expected earnings came from premium growth across all its business segments. It is in five state public exchanges and now says it will enter three more states.
Date: August 6, 2014