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Council approves $781,110 amendment to shore up employee benefits trust after multi‑quarter deficits
Summary
City staff reported a multi‑quarter deficit driven by claims since late 2024 and Department of Insurance reserve requirements; council approved a $781,110 FY2026 budget amendment to restore trust balance and directed improved quarterly reporting.
City staff on Dec. 16 told the Meridian City Council that the Employee Health Benefits Trust has been operating in the red since claims surged in late 2024. Christina Scott and Scott Howell (Gallagher) explained that large Q4 2024 claims, subsequent quarters of higher‑than‑projected claim activity and timing of contributions left the trust below Department of Insurance reserve requirements.
Staff said the Department of Insurance requires the trust to maintain a combined surplus and IBNR (incurred‑but‑not‑reported) balance approaching $3 million. Presenters walked the council through monthly claims vs. funding volatility, stop‑loss reimbursements, and the limits of historical projection tools used when 2026 numbers were set in 2024. Staff proposed a FY2026 budget amendment of $781,110 to help restore the trust balance and remain compliant with state regulations.
Council members pressed for clearer staff memos and committed to receiving quarterly trust updates; one councilmember said future budget planning should consider larger trust contributions to avoid repeated emergency requests. The council then approved the requested $781,110 amendment on a unanimous voice/roll call vote recorded in the meeting.
