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Custer County says new self‑insurance health fund requires amendment after first quarter
Summary
After three months on a new internal health insurance system, Custer County finance staff told commissioners projected medical and admin costs exceed the FY26 budget and they will bring a budget amendment to raise the 56 fund expenses to roughly $800,000 from $500,000.
CUSTER COUNTY — County finance staff told commissioners that Custer County’s newly established internal health insurance (56) fund is under‑budgeted based on three months of actuals and will require a mid‑year budget amendment.
The presenter said the county moved away from an external pool (CCTSI) and created an internal service fund for medical claims, broker/admin fees, prescriptions and related items. The FY26 budget had forecast $500,000 in revenue and $500,000 in expenses for the 56 fund, but preliminary calculations using three months of data indicate the expense line should be increased to about $800,000.
“I'll be coming to you with a budget amendment that will clean this up a little bit,” the presenter told the board, adding that staff now have monthly admin and claims figures broken out and can make more accurate projections.
Key points
- Conversion and accounting: staff said the conversion to an internal fund produced more granular monthly data that revealed admin fees, broker charges and claims will push expenses higher than originally budgeted.
- No grant offset: the presenter said there is no grant available for the health insurance fund — this is funded by county payroll deposits and internal resources — and that staff expect the fund to stabilize and possibly bank between $20,000 and $60,000 annually once fully informed by a full year of claims experience.
- Next steps: finance will draft and present a budget amendment to adjust the 56 fund expense lines to reflect current forecasts and will return to commissioners with documentation in the near term.
The presenter provided the update during the county’s mid‑year budget review and said the amendment will follow this preliminary analysis.
