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Kane County officials review health insurance reserves, stop-loss and upcoming rate options
Summary
County human resources staff told the Human Services Committee that the county's self-funded health plan has a healthy reserve and will be examined by brokers next week ahead of a proposed rate package next month; staff and members discussed stop-loss, employer/employee shares and monthly invoice volatility.
KANE COUNTY, Ill. ' County human resources staff told the Kane County Human Services Committee on May 14 that the county's self-funded health insurance fund is in a healthy position and that brokers will recommend rate options next week to keep rates stable for the coming year.
The county's human resources director, Christine Davis, told the committee the Blue Cross Blue Shield invoice for March was recorded at about $1,500,000 and that monthly totals, including employee, spouse and dependent coverage, are on file. Jamie (staff member) said the most recent invoice shown in the packet is the current month's invoice and warned invoices can change because claims may be billed months after the services were provided.
Committee members said the fund's reserve level and the county's stop-loss program were the key issues. Jamie said the county absorbs 83% of rate changes while employees absorb 17%, and that the broker will provide rate scenarios next week with a formal proposal expected at the committee's next meeting.
Members and staff discussed the reserve account and how excess monthly funding is treated. Jamie confirmed that amounts received in excess of current-month claims are placed into the health fund reserve. Committee member John Roth asked whether the reserve is restricted; staff said the reserve is a health fund used only for health claims and that reductions in the reserve are reflected by reduced rates rather than general fund transfers. A committee member observed that the month-to-month spread shown in the packet was roughly $115,000 and asked whether that difference is being added to reserves; staff confirmed it is.
Committee members also discussed the plan's stop-loss threshold. Jamie said the individual stop-loss is set at $205,000 per year; the county pays claims up to that amount and the carrier administers the claims. Jamie said the broker recommends that stop-loss level after reviewing incurred-but-not-yet-received (IBNR) claims and other trend factors.
Why it matters: the county is balancing rate stability for employees with protecting the fund against high-cost claims. Staff said they will review broker recommendations next week and bring a rate proposal to the committee next month, providing the committee with choices on how to use reserves while addressing a recent state mental-health mandate that may increase costs.
Committee members asked for additional detail about earnings on the health fund and how reserve levels are calculated; Jamie said finance manages investments for the fund and that the broker's annual evaluation considers the county's monthly cost trends and IBNR estimates.
Looking ahead: staff said they will return with a rate proposal and options at the next meeting and that the committee's brokers will present formal recommendations on stop-loss and reserve strategy.
