Title
Human Resources Department, Risk Management Division, recommending the Board approve a Budget Transfer increasing revenue and appropriations in the Risk Management special revenue fund in the amount of $700,000 to fund the County's Health Plan (4/5 vote required).
Body
BUDGET SUMMARY: |
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Total Estimated Cost |
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$700,000 |
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Funding |
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Budgeted |
$ |
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New Funding |
$ |
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Savings |
$ |
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Other |
$700,000 |
fund balance |
Total Funding Available |
$700,000 |
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Change To Net County Cost |
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$0 |
Fiscal Impact/Change to Net County Cost: Appropriations sto be increased by drawing down the Health Fund Balance in order to fund claims through FYE 2009-10.
Background: The County Health Plan is comprised of three major health care programs for its employees: Blue Shield, which is self-funded, and Kaiser and PacifiCare, which are fully insured. Health care costs, specifically in the self-funded program for FY 2009-10 have increased significantly over what was estimated and budgeted for the current fiscal year. A budget transfer was approved by the Board on June 15, 2010, in the amount of $1.5 million to offset these increases, however, due to recently reported large claims, it is estimated that an additional $700,000 will be required to cover the unexpected additional year end costs over budget for claims. The larger claims are partially offset by reimbursements from the County's stop-loss insurance. The total projected additional year end cost over budget for claims is now estimated to be $2,200,000 and requires the use of an additional $700,000 of fund balance.
Reason for Recommendation: To date, claims costs have exceeded the FY 2009-10 budgeted appropriations and a budget transfer from the special revenue fund balance is necessary to cover the projected year end costs for claims.
Action to be taken following Board approval: Board to approve budget transfer to increase appropriations for claims drawing down the Health Fund balance.
Contact: Donna Mullens, x6060
Concurrences: CAO