Health insurer CIGNA Corp. (CI) recently revealed plans shift to its headquarters to Bloomfield, Connecticut after it was nominated to receive economic benefits from the state government in exchange for new job creations. The CIGNA base will move from Philadelphia, where it has been stationed since 1982.
CIGNA would be the first to receive $50 million of economic benefits from Connecticut Governor Dannel P. Malloy under the “First Five” program, a job creation initiative, passed by the Connecticut Department of Economic and Community in June 2011.
The salient feature of the “First Five” program is that it would offer a variety of tax credits and other economic incentives to the first five businesses each year that create at least 200 new jobs within two years or invest at least $25 million and create a minimum of 200 jobs within five years.
CIGNA is required to add 200 jobs in the state in exchange for $50 million of economic benefit in the form of tax credits and job training grants that can be used over the next 10 years. If CIGNA successfully adds more than 200 employees to its Connecticut workforce, it will be rewarded with further benefits. At present, the company employs 3,800 workers in its Connecticut offices.
Apart from the $50 million investment from the government’s coffers, CIGNA is also mulling over additional investments in its Connecticut facilities to ramp up job creation and provide business growth in the region.
The Government of Connecticut is aggressively seeking to improve and create new jobs and businesses in the state. To this end, it launched the “First Five” program, which saw CIGNA become its first beneficiary.
Given the Government’s thrust to spur job and business growth in Connecticut, we will see more businesses flocking to the state. After the state successfully attracts the first five businesses, it will increase its targets to more number of businesses.
However, the base shift will cause no job cuts in Philadelphia, where there are 1100 employees at present, and the business in the state will be unaffected.
CIGNA is among the top five health insurers in the U.S., the others being UnitedHealth Group Inc. (UNH), Aetna Inc. (AET), Humana Inc. (HUM), and WellPoint Inc. (WLP).
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