Interim CFO reports $167.6 million trust-fund balance, outlines IBNR reserves

Interim CFO Greg Sass gave a preliminary year-end financial report, saying the Health Service System closed the fiscal year on June 30 with $167,600,000 in trust-fund cash — about $60,600,000 more than the same date the prior year.

Sass attributed much of the increase to timing and utilization differences under the Blue Shield Flex plan and to excess collections over claims payments that will be reserved for incurred-but-not-reported (IBNR) liabilities at year end. "We closed the year with $167,600,000 in the trust fund, which is a $60,600,000 increase over the same date in June," Sass said.

He summarized actuarial and reserve details: the Blue Shield Flex plan requires an $18,100,000 IBNR reserve; the City Plan requires a $6,200,000 reserve (a $1,700,000 decrease year-over-year), and Delta Dental's reserve declined to about $3,100,000. Sass said these adjustments and excess collections will increase assets available for planned benefits and position HSS to subsidize plan rates for the next year. He also noted that KPMG will begin the audit next week and that final audited figures will be refined during the audit process.

A board member asked whether the earlier projection of roughly $25,000,000 for Flex IBNR matched expectations; Sass explained that the $25,000,000 was an estimate based on projected utilization and that actual IBNR levels depend on claim submission and adjudication timing.

Sass said HSS was running slightly favorable on personnel and benefits year-to-date and was working with the Controller's Office to close small variances; overall preliminary net variance was about $54,000 positive before year-end adjustments.

The board had no further action on the report; members accepted the preliminary figures and awaited the KPMG audit.