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County staff recommend insurance reserve target after favorable claims year
Summary
Finance staff reported the county's employee insurance account balance ($120,614), described worst-year claims (~$180,000) and recommended maintaining a reserve equal to 10% of assessed risk (approx. $71,000); supervisors discussed increasing the partial self-funded reserve to $200,000—25,000 to be conservative.
County finance staff updated supervisors on the status of employee health insurance and the county's partial self-funding exposure.
The staff presentation noted: "Your insurance account balance for your partial self funding and employee benefit subsidy is $120,614," and detailed recent claims history and risk estimates. Finance staff and a named staff member (Denise) recommended maintaining a reserve at roughly 10% of calculated risk — which staff calculated as about $71,000 under current figures — and discussed options to increase the reserve to $200,000 or $205,000 to reduce vulnerability to consecutive high-claim years.
Supervisors weighed the trade-offs. Some favored placing an additional $25,000 in the supplemental fund to reach a higher cushion for claims; others noted the county's recent claims have been below the worst-year figures, reducing near-term pressure. Staff said they would re-run risk assessments and present updated numbers reflecting the addition of new employees (such as ambulance staff) and projected premium changes.
Why it matters: the county partially self-funds some employee claims; maintaining an appropriate reserve protects the county against large, unbudgeted claim years and reduces the risk of midyear transfers or unexpected budget pressure.
What comes next: staff will provide updated risk assessment figures and an adjusted worksheet showing the budget impact of raising the insurance reserve to the board.
