From
Lisa Norris, Human Resources Director
Title
Insurance Fund Monthly/Quarterly Review
Presenter
Lisa Norris, Human Resources Director
Recommended Action
Review Only
Analysis
This analysis covers the experience in the Employee Insurance Fund through May 2017:
Employee Insurance Fund Summary (Attachment 1):
With the May 2017 close, the insurance fund was hit hard and has gone in the red after a $2.1 million dollar month - the highest I found in our history. Over $400,000 was from one claim at Texas General for emergency services and subsequent admission, which is now the first claimant to also exceed $400,000 for this plan year. This month also experienced five claim weeks which didn't help. Other than the high claimant, the month was fairly normal from a claims experience standpoint (with the 5 weeks causing it to look higher). Since this month drastically impacts projections for year-end, and subsequently projections for the upcoming budget year, our consultant reassessed projections and plan costs. As you can see in column 15, claims for actives are now projected at $15.1 million by year-end and $3 million for retirees, thereby putting the year-end fund projection at -1,146,983 operating imbalance. We are also reassessing the Incurred but Not Reserved reserve balance with the consultant to see if our required funding needs to be increased from an actuarial standpoint. We may still be able to recover some from this month's impact, but with only a few months left in the year, recovery may be limited.
Another notable item is in the revenue section where we have increased the projected "Transfer in from the Risk Fund" on row 15 for stoploss reimbursement to $1,011,396. Because we originally planned for $800,000, and because claims expenses are now over budget, we were required to submit a budget amendment to account for the modifications. The modications affect both the Insurance Fund (for the increased transfer in from Risk, and the increased expenditures over budget, along with the Risk Fund for the increased "Transfer Out" from the Risk reserve. This will be submitted in another item on this same agenda and will be approved by Council tonight.
With all of these recent impacts, staff has worked diligently to provide you with a proposed FY 17-18 balanced budget in the coming weeks. Changes to recover from this year and the past year, while maintaining reserves and funding required above 45 days, has required us to redesign plans, benefit levels, network and costs for sustainability. We have educated and continue to educate on using the plan and our benefits wisely, but it has not achieved the level of impact we had hoped long-term.
UHC Slides
As of April, we still only have 4 claimants that have exceeded $100,000 in claims paid so far this calendar year. On the last slide, our high claimants had a positive month with only a few hitting the light blue amounts of $1,000-$49,999 in claims for the month, and none of them exceeding $50,000 during April.
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.