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Local Officials Work To Save 700 Jobs At Visalia Cigna

August 4,2014
Screen Shot 2014-08-04 at 11.00.39 AMLocal 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 and 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 who have a sizable expatriate customer base overseas now impacted by Obamacare. 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 or 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 US-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 one in Visalia California and one in Delaware affecting 500 workers and even relocate their corporate office overseas if need be.

“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.

“A bill passed in the House (this spring) and now is pending in the US Senate” says Worthley that apparently now has the support of California’s two US Senators – both Democrats and strong supporters of Obamacare.

“It looks promising but time is of the essence“ he adds.

Making the job more difficult is a requirement that the legislation be supported by “unanimous consent” Worthley says.”That’s a tall order with this congress.

Congress is on their summer break this month and won’t return until September 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 US residents.

“We need to fix the expat issue, but not by unfixing healthcare reform“ said Congressman Sander Levin, a Democrat from Michigan recently.

The GOP-led House has passed more than 50 bills looking to end Obamacare in some way. Referring to the ongoing tug of war over the new law – another congressman said “let’s call a temporary truce (over the ACA) to protect those jobs” said John Carney of Delaware whose state also faces losses if the company moves overseas.

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 1400 employees here when it added 300 jobs in 2001 and built their headquarters on Akers.The company has had some presence in Visalia since around 1991. Some still work in that Akers building but the 150,000sf office has been sold and is being divided up since Cigna requires only about 50,000 sf.

The current call center operation takes calls for overseas clients that include expatriate members.

Ironically, Cigna reported financials 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% year over year. Cigna’s better-than-expected earnings came from premium growth across all its business segments. It is in 5 state public exchanges and now says they will enter 3 more states.

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