Kane County committee reviews self-insured health fund as reserve nears 50% of expenses

Kane County Human Services Committee members heard a status report on the county's self-insured health insurance fund at their first meeting of 2025, including current fund balance, enrollment totals and timing for rate-setting.

The update, delivered by Kathy Hopkinson of the Finance Department and Jamie (staff member), said the fund's balance at the end of 2024 was about $9,300,000. "The current fund balance, at the end of 24 is about $9,300,000," Hopkinson said, adding that the county targets a reserve between 25% and 50% of annual expenses.

Committee chair Bridges said the fund was set up so employer and employee contributions from county payroll feed the special health insurance fund, and Jamie explained the county pays health and dental invoices, typically a month in arrears. The presenters told members the fund grew 16% from 2022 to 2023 and 26% from 2023 to 2024.

Why it matters: committee members were asked to monitor the reserve because it affects employee premiums and the county's ability to absorb unusually large claim years. Hopkinson explained that lowering the reserve would be accomplished by setting next year's rates below expected payouts so reserve balances are used to cover the difference.

Key details discussed include: - Fund revenue sources: employer contributions budgeted across county funds plus employee payroll deductions; Blue Cross and other carrier invoices are paid from the fund. - Reserve target: committee guidance has been to aim for 25%'50% of annual expenses; 25% of 2024 expenses was roughly $5 million and 50% roughly $10 million, placing the current balance near the top of the range. - Plan size and spending: presenters described total plan expenditures in the $16'$18 million range and monthly Blue Cross invoices that typically range from about $1.3 million to $1.8 million; the invoice for the month shown was about $1.6 million. - Enrollment and plan options: the plan covers just over 1,000 employees, plus 424 spouses and 718 dependents; an additional 77 people participate in the county's medical expense reimbursement plan (MERP). A new high-deductible HSA option drew about 40 participants in its first year. - Cost drivers: prescription claims and high-cost specialty drugs are a major cost driver; presenters said some drugs can cost upwards of $10,000 per month to the plan. The committee was told the plan accepts provider claims up to six months after the service date (incurred-but-not-received or IBNR), so recent policy-year totals can increase as late claims are posted. - Stop-loss and market contracting: the county maintains stop-loss (catastrophic) coverage; committee members asked for a carrier quote sheet that describes the county's and carriers' respective responsibilities.

Committee direction and next steps: Jamie told the committee staff will begin broker meetings in February and that a first draft of proposed rates typically comes to the committee in April, with final rates required by July to support open enrollment. Members were asked to review the reports and to identify any additional metrics they want the staff to track in monthly materials.

Committee members emphasized that plan disruption (for example, changes to a formulary or coverage for a particular drug) is a sensitive issue for employees and unions and that plan design choices should account for member preferences as well as price.

The Human Services Committee did not take a formal vote on fund targets at the meeting; staff recommended that the committee consider setting a more specific reserve target as part of the 2026 budget process.