Kootenai County finance director reports $971,000 health‑plan shortfall; commissioners approve BCS stop‑loss option

Kootenai County Finance Director Brandy Falcon told the Board of County Commissioners on Dec. 16 that the county’s health insurance fund closed fiscal year 2025 with "a negative fund balance of $971,000 at year end FY '25." Falcon attributed the shortfall primarily to claims that exceeded budget, prior withdrawals from the fund in earlier years, and underbudgeted department transfers.

Falcon outlined the county’s self‑funded plan structure, saying Kootenai County uses a third‑party administrator (Regions) and consultants (Alliant). She explained stop‑loss insurance protects the county from catastrophic individual or aggregate claims and said the county has greater control and data access under a self‑funded model.

Why it matters: Falcon told commissioners that aggressive, low claim budgets in prior cycles left the health fund without adequate reserves when claims spiked. She said the budget for medical claims "drastically exceeded the budget for claims by 3,800,000.0 in FY '25 and 1.6 7,000,000 in FY '24," and that previous boards "used almost $1,900,000 of health insurance fund balance" to cover increases in FY15, FY16, FY18 and FY19.

Falcon described Fund 14 as the county’s health insurance internal service fund, which aggregates employee contributions, the county’s payroll‑budgeted insurance expense, stop‑loss premiums and related administrative costs. She said the auditor’s office will stop using projected participant counts from HR for the county contribution calculation and instead will use actual plan participant numbers; she also recommended budgeting claims more conservatively going forward to restore reserves.

Falcon said the Board had already set aside $1,000,000 in assigned fund balance in Fund 10 and that the auditor’s office used that amount to make Fund 14 whole at the FY25 year‑end. Looking ahead, Falcon said she will recommend the board assign $3,000,000 in fund balance for health care expenses to provide a cushion for FY26 and help rebuild emergency reserves. She also warned FY26 stop‑loss costs are "drastically increasing" and said pharmacy savings recommended by Alliant are expected to take effect in January.

Because Alliant and staff needed to discuss individual claim details, commissioners voted to move into executive session pursuant to Idaho Code 74‑206(1)(d). After returning to open session, the board took formal action to select a stop‑loss option. A motion to "approve moving to BCS stop loss option 1" passed on recorded voice votes; the motion carried.

What the board decided: The commissioners recorded affirmative votes and approved moving forward with the BCS stop‑loss option 1. The meeting adjourned at 12:50 p.m.

What remains unresolved: Falcon forecasted the health insurance fund may again show a negative balance at FY26 year‑end unless the board adopts the recommended assignment of fund balance and the auditor and Alliant’s budgeting adjustments reduce volatility over multiple years.