From
Lisa Norris, Human Resources Director
Title
Insurance Fund Monthly and Quarterly Review
Presenter
Ashley Land, Human Resources Manager
Recommended Action
Review Only
Analysis
This analysis covers the experience in the Employee Insurance Fund through the March 2018:
Employee Insurance Fund Summary (Quarter-End) and Monthly Review (Attachment 1-2):
The Insurance fund ended the second quarter of the fiscal year with another great month and positive operating balance. From a revenue perspective, the 2nd quarter (column 11) shows the increases from the plan year affected through premiums versus the first quarter (column 10). Employee contributions are up an average of $32,000 per month (row 4), averaging $264,105 in Quarter 2 versus $232,081 in Quarter 1. Retiree contributions (row 6) reflect monthly increases as well with Quarter 2 averaging $60,240 versus $48,918 per month in Quarter 1. Both of these are reflective of the plan changes, premiums and choices that began January 1. Our dental carrier changed January 1 from Metlife to Cigna and reduced employee premiums. Dental PPO premiums (row 5) decreased slightly by about $3,000/month as reflected in column 11 versus 10 with Dental HMO premiums (row 9) decreasing by about $500 per month (they also have fewer headcounts on that plan). Life premiums increased slightly resultant from salary increases which employees received in October, but do not impact life premium calculations until January annually. Moving to expenses, the most notable items are once again in claims. March active claims came in at $688,303, the lowest claim month of the year, and retiree claims at $140,477. Projecting to year-end, and still using the worst case scenario on claims projections (highlighted in red column 9), both active and retirees are estimated to come in beneath budget. With the increased revenues and decreased claims, we are projected to have a year-end Operating balance of $2,341,923 (column 12, row 41).
Each time this year, we assess claimants from 2017 that exceeded our self-imposed $400,000 specific stoploss deductible to consider whether we want to reimburse ourselves to the Insurance Fund FROM the Risk Fund Stop Loss Reserve. The close of March ends the "usual" run-off period for any 2017 claims to finalize payments. UHC has provided the report to us for the two claimants that exceeded that threshhold as attached on slide 2. Between the two claimants, a total of $1.7 million was paid, of which a total of $915,714 was over the individual $400,000 stoploss threshhold. With this we have 3 choices for decisions that we can do separately or in combination: 1) draw down the remaining $500,000 contingency reserve in the Employee Insurance Fund (row 47 on the Fund Summary); 2) transfer in from the Risk Fund Stoploss Reserve an amount we determine up to the $915,714, or 3) draw down neither of those two funding sources and rebuild the Contingency Reserve back to the $2,000,000 that we target the balance to be with any positive operating balance at year-end. Our goal, per the actuary, is to hold about $4-$5 million in total stoploss reserve funding (Contingency Reserve + Stoploss Reserve) for unexpected high claimant losses. It is staff's recommendation to rebuild the Contingency, if the claims hold as projected, unless directed otherwise. This allows us to rebuild what we have depleted over time, thereby improving our fiscal ability to support future high claim "hits" that occur. We look to the Finance and Government Committee to provide a recommendation to staff for this item.
Wellness is off to a strong start with the new quarter push to "get up and get moving." The first quarter focus is on getting preventative visits and annual physical examinations done at a Primary Care Physician. The Health Fair was a huge success.
UHC Slides are attached for your convenience but will not be detailed at this time unless you have questions since these quarterly reviews take a bit longer, and the true impact for this year will come following January.
Financial Consideration
The current budget is approved and no financial consideration is necessary at this time until additional claims data based on future months can be reviewed.