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Employee benefits trust reports $25,000 shortfall; audit finds governance issues
Summary
Christina Barney told the council the employee benefits trust showed a roughly $25,000 shortfall at the end of Q1, pointed to a new Rx rebate timing rule that created a six‑month cash lag, and said DOI audit findings prompted governance and vendor-control changes; a market analysis will be delivered to the council later.
Christina Barney, who presented the city’s employee benefits trust update, told the Meridian City Council on July 7 that the trust’s audited financials show assets of about $3,180,000 and a required surplus of $2,550,000, leaving the trust approximately $25,000 short of its minimum required surplus at the end of the first quarter.
Barney said the department’s audit by the Department of Insurance found no adjustments that changed net reported assets but identified governance, vendor controls and actuarial practices that needed improvement. “We were very responsive in getting them records and also responding to their findings,” she said. She added the trust is amending bylaws and practices in response to DOI recommendations.
Barney told the council a legislative change effective Jan. 1, 2026, which requires plans to move to a traditional Rx rebate process, created about a six‑month lag for receiving manufacturer rebates and contributed to the timing shortfall. “Had we received that rebate in a timely manner, we would not be in a deficit at this point,” she said.
On quarterly performance, Barney reported Q1 net income of $203,600 and said the trust’s cash on hand and receivables are included in the $3.18 million asset figure. She described the trust’s immediate priorities as completing a market analysis, finalizing plan‑design options, improving reserve monitoring and revamping benefits communications to employees ahead of open enrollment.
Council members asked for additional detail: Councilman Schoeder requested follow‑up on whether the survey results can be provided to the council for review; Councilwoman Will Roberts said she would like the actual amount the city pays in premium taxes (Barney estimated roughly $2,000 per year). Barney said the survey was administered anonymously to approximately 650 employees, with 217 responses (about 33 percent), and emphasized employee interest in choice, clarity and cost control when choosing plan options.
Next steps: Barney said the trust will complete and return with its pending market analysis and proposed plan designs in the coming months, and staff will report back to council with details about options and recommended adjustments.
