Health Service Board approves IBNR and contingency reserve amounts for 2024 fiscal year
Loading...
Summary
The Health Service Board voted unanimously to approve incurred‑but‑not‑reported (IBNR) reserves and contingency reserves (90th‑percentile confidence level as presented) for SFHSS self‑funded and flex‑funded plans as of June 30, 2024.
The San Francisco Health Service Board voted unanimously on Jan. 8 to adopt SFHSS staff and Aon actuary recommendations for incurred‑but‑not‑reported (IBNR) reserves and contingency reserves for the self‑funded and flex‑funded plans as of June 30, 2024.
Aon lead actuary Mike Clark presented the actuarial analysis and described the reserve policy framework used to derive the values. Clark said the board-approved contingency reserve policy directs the plan actuary to present recommendations at three statistical confidence levels; the board chose to continue using the “90 fifth percentile confidence level” presented by staff — language used in the presentation to describe the selected confidence interval. Clark and SFHSS staff said contingency reserves are designed to protect the trust against claim experience worse than projected; IBNR covers unpaid liabilities for services rendered on or before the measurement date but not yet paid.
SFHSS staff said the IBNR total declined from the prior year largely because claim‑processing backlogs that developed during the pandemic have largely normalized. Clark reported the contingency reserve total increased by 4.5 percent from the prior year but said contingency reserves were fully funded on the balance sheet. SFHSS chief financial officer Iftikhar Hussain and principal administrative analyst Yuri Gologorski participated in the review.
A motion to approve the IBNR and the 90th‑percentile contingency reserve amounts was moved and seconded; a roll‑call vote recorded the five commissioners — President Howe, Vice President Zavansky, Commissioner Kremen, Commissioner Sass and Commissioner Wilson — voting aye and the motion passed unanimously.
The board packet noted that the changes to contingency reserves will be reflected in the stabilization reserve calculations presented for the plan year ending Dec. 31, 2024, at a later meeting.
Approved action
• Motion: “We approve the IBNR and 90 fifth percentile competence level contingency reserve amounts as of June 30 2024 as presented in the material before us.” (motion moved by Commissioner Sass; second by Commissioner Kremen — as recorded during the meeting)
• Vote: President Howe — Aye; Vice President Zavansky — Aye; Commissioner Kremen — Aye; Commissioner Sass — Aye; Commissioner Wilson — Aye.
The board opened the item for public comment; no callers requested to speak on the record during the public‑comment portion for that agenda item.
