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SFHSS board approves 06/30/2020 IBNR and contingency reserves unanimously
Summary
The board accepted Aon’s recommended incurred‑but‑not‑reported and contingency reserve amounts as of June 30, 2020, covering Blue Shield flex plans, the UnitedHealthcare city PPO and Delta Dental; the motion passed unanimously after presentation and public comment period closed with no callers.
The Health Service System board voted unanimously to approve the actuary’s recommended incurred‑but‑not‑reported (IBNR) and contingency reserve amounts as of June 30, 2020.
Aon actuary Mike Clark presented the calculations for the Blue Shield flex‑funded HMOs (Access Plus and TRIO), the UnitedHealthcare self‑funded PPO city plan and the Delta Dental self‑funded PPO. Clark explained that the IBNR calculation is a point‑in‑time estimate of unpaid claim liability as of the fiscal year end and that contingency reserves are statistically derived amounts to protect the trust against adverse experience.
Clark noted differences in year‑over‑year movements driven by patterns in service use during the pandemic: medical plan activity had largely resumed by June 2020 while dental services were still suppressed, producing a substantial reduction in the Delta Dental IBNR reserve compared with the prior year.
Commissioner Scott moved to accept the actuary’s recommendation; a second was recorded. The board opened the item for public comment, heard none, and approved the recommendation by unanimous voice vote.
The approved reserve amounts will be reset at the next annual measurement (06/30/2021) and components of the contingency reserve change will feed into later stabilization reserve calculations presented to the board.
