From
Lisa Norris, Human Resources Director
Title
Ordinance amending the FY 2016/2017 Employee Insurance and Risk Management Fund Operating Budgets
Presenter
Lisa Norris, Human Resources Director
Recommended Action
Approve
Analysis
Employee Insurance Fund:
The FY 2015/2016 Employee Insurance Fund was amended to account for worse than originally projected high claims costs. That incremental adjustment reduced the ending resource balance for FY 2015/2016 to $2,198,958, therefore affecting the proposed FY 2016/2017 "Beginning Resources" and the fund as a whole. The new Beginning Resource Balance is modified from $2,536,905 to $2,198,958. With the high claims costs assessed by fiscal year-end in 2015/2016, we reassessed projected claims costs and reimbursements expected. We have one claimant that reached $1.2 million so far in 2016. Since we reimburse ourselves from the Risk Fund Stoploss Reserve for any claimant costs over $400,000, we are modifying the Stoploss Reimbursement "transfer in" from the Risk Fund to the Insurance fund from the originally projected $300,000 to $800,000 - a increase of $500,000. Additionally, due to increased claims costs, we reforcasted our active and retiree claims through our benefits consultant. We recommend that active claims be increased by $469,163 and retiree claims by $163,000. Additionally, to help offset these high costs, we recommend reduction of the contingency reserve from $1,000,000 to $500,000. Inclusive of all of these recommended changes, the total appropriations increases from $19,151,992 to $19,784,155 and our "Ending Resources" increases $2,355,506 to $2,461,343 for FY 2016/2017. Additionally, by modifying the contingency reserve, we were able to keep our "Balance Above 45 Days" positive. As we have done in the past, it is our expectation to gradually rebuild the Contingency Reserve over time back to the $2,000,000. This reserve is not mandated, but is done as "best practice" to protect us and...
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