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Committee weighs higher 2026 health-insurance costs and recommends shoring reserves
Summary
Committee members and staff reviewed county health insurance projections and discussed creating an insurance reserve fund and maintaining a target balance in the self-insurance fund to cover anticipated increases in 2026.
During the April 24 Long Term Finance Planning Committee meeting, Greg Garrattas and county staff briefed members on projected increases in county health-insurance costs and possible reserve strategies.
Garrattas and staff said recent estimates show group health costs could rise substantially for 2026; staff discussed maintaining a self-insurance fund balance and establishing a separate insurance reserve fund. Garrattas said it would be prudent to retain roughly $500,000 in the self-insurance fund as a working balance and suggested an insurance reserve on the order of $2'$3 million to cover larger, unexpected increases.
Why it matters: Committee members noted that higher insurance costs interact with any decisions on salary increases or new hires. Staff told the committee that, based on preliminary modeling, 2026 health costs might require roughly $800,000'$1,000,000 more than 2025; that figure is an estimate and subject to confirmation.
Committee discussion and staff guidance included: - Keep the county's capital/cash-management funds distinct: staff recommended the CCD (capital) fund continue to accumulate rather than be treated like a rainy-day operating fund. - Use one clear target for general-fund reserves rather than multiple minimums and targets, to simplify management and reporting to rating agencies. - Delay major hiring or broad salary increases until the county has firmer figures for 2026 insurance costs and state budget decisions.
Ending: County staff said they will continue fine-tuning the 2026 health-insurance estimate, meet with State Board of Accounts staff on allowable reserve structures, and return to the committee with refined numbers at a future meeting.
