Star has about 200,000 plan members, as well as 1,000 corporate clients, according to a Cigna news release. Cigna would not disclose how much it paid for the company, but it did admit that the price was less than $175 million, according to the Wall Street Journal.
According to the WSJ, Star owns about 20% of the plans in the limited-benefit market. These plans offer participants affordable premiums for very limited medical coverage. They cover a set number of doctor visits, prescription drugs and lab tests and can start at about $40 per month, though some critics assert that employees sometimes do not understand the extent of the plan’s limits, and also that the plans don’t really provide insurance, according to the WSJ. Plan participants usually pay the entire premium.
Star offers its plans to hourly and part-time workers and their families, according to Cigna’s news release. According to one report, the “mini-medical” plans are aimed at new employees in the waiting period to get comprehensive insurance and for employees covered by high-deductible plans (See Special Report: HEALTH CARE: Mini-Meds) . The option could also help ease the blow for retirees of companies cutting back on or eliminating retiree medical coverage.
Mini-meds are most common for hourly and part-time workers at companies such as temporary-work agencies and fast-food chains, according to the WSJ, but there is a growing trend of employers offering them as companies scale down on benefits or hire more part-time and contract workers.
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