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Finance staff reports turnaround in self-funded health insurance; district to add nearly $600,000 to reserves
Summary
Administration reported a positive swing in the self-funded health insurance fund, with funding over expenses by about $550,000 and plans to assign nearly $600,000 to the fund balance; the report was informational with questions about reserve targets.
A finance staff member presented the district's year-end self-funded health insurance report on July 27, saying the fund showed a marked improvement compared with the prior year and that the district will be able to assign nearly $600,000 to the assigned fund balance.
"So basically, we are going to be, putting nearly $600,000 into the assigned fund balance," the presenter said, explaining the swing was driven in part by lower claims activity ("claim activity compared to last year, down about 0.75 of $1,000,000"). The presenter walked trustees through monthly funding sources and seasonality (premium equivalence, stop-loss reimbursements and pharmacy rebates) and noted January increases tied to renewal of stop-loss premiums and other fixed costs.
Board members asked about the reserve target; the presenter cited a common benchmark of roughly three months of claim activity and estimated claim activity at about $300,000 per month, indicating a target in the $900,0001,000,000 range to provide a stable reserve. The presentation was informational only and no formal action was taken at the meeting.
