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Home My WebLink AboutCSS 2022-09-26 Item 1C - Budget - Proposed 2023-2024 Biennial Budget: LEOFF 1 Retiree Health Careof Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: City Council FROM: Vicky Carlsen, Finance Director CC: Mayor Ekberg DATE: September 20, 2022 SUBJECT: LEOFF 1 Retiree Self -Insured Healthcare Plan 2023-2024 Proposed Budget ISSUE Review the LEOFF 1 Retiree Self -Insured Healthcare Plan fund 2023-2024 proposed budget. BACKGROUND This fund accounts for the City's self-insured healthcare plan for Law Enforcement Officers and Firefighters (LEOFF) retirees. The fund receives contributions from both the police and fire departments on behalf of the retired LEOFF 1 employees. The City currently has 32 members receiving benefits under this plan. It is a closed plan, meaning no new members are able to join LEOFF 1. DISCUSSION This fund covers the City's LEOFF 1 retiree self-insured healthcare claims and administrative fees. The budget has been drafted to reflect estimated expenses and is funded at the level recommended by the City's broker and actuary. RECOMMENDATION For information and discussion ATTACHMENTS Draft LEOFF 1 Retiree Self -Insured Healthcare Plan Fund 2023-2024 Budget 17 18 DEPARTMENT: Finance FUND: LEOFF I Retiree Self -Insured Healthcare Plan RESPONSIBLE MANAGER: Vicky Carlsen Description DIVISION: N/A FUND NUMBER: 503 POSITION: Finance Director This fund accounts for the City's self-insured healthcare plan for Law Enforcement Officers and Fire Fighters (LEOFF I) retirees. This fund receives contributions on behalf of retired LEOFF I employees through their respective organization units. Healthcare claims and program administrative fees are expensed in this fund. 2021-2022 Accomplishments ♦ Optimized use of Medicare insurance coverage to manage plan costs. Strategic Goal 4 2023-2024 Outcome Goals ♦ Continue to analyze and revise funding structure to achieve a smooth and predictable premium trend. Strategic Goal 4 2023-2024 Indicators of Success ♦ A smooth funding trend is achieved. Strategic Goal 4 ♦ Reserves levels are maintained. Strategic Goal4 ♦ Costs are managed and stabilized. Strategic Goal 4 19 Revenue and Expense Summary LEOFF 1 Self -Insured Healthcare Plan Operating Expenses Insurance Program Costs Professional Services Other Expenses 374,959 - - Actual 288,486 1,750 - 479,500 5,000 500 Budget 441,784 5,000 500 Percent Change 2020 2021 Projected 2022 2022 2023 2024 2022-2023 2023-2024 Operating Revenue Investment Earnings Employer Trust Contributions 21,631 254,868 405 270,249 439 295,755 1,000 435,000 500 350,000 500 350,000 -50.0% -19.5% 0.0% 0.0% Total Operating Revenue 276,499 270,654 296,194 436,000 350,500 350,500 -19.6% 0.0% Operating Expenses Insurance Program Costs Professional Services Other Expenses 374,959 - - 331,071 - - 288,486 1,750 - 479,500 5,000 500 426,296 5,000 500 441,784 5,000 500 -11.1% 0.0% 0.0% 3.6% 0.0% 0.0% Total Operating Expenses 374,959 331,071 290,236 485,000 431,796 447,284 -11.0% 3.6% Indirect Cost Allocation - 11,920 12,040 12,040 12,642 13,274 5.0% 5.0% Total Expenses 374,959 342,991 302,276 497,040 444,438 460,558 -10.6% 3.6% Beginning Fund Balance 435,054 336,595 264,258 264,258 258,176 164,238 -2.3% -36.4% Change in Fund Balance (98,459) (72,336) (6,082) (61,040) (93,938) (110,058) 53.9% 17.2% Ending Fund Balance $ 336,595 $ 264,258 $ 258,176 $ 203,218 $ 164,238 $ 54,180 -19.2% -67.0% Unrestricted 336,595 264,258 258,176 203,218 164,238 54,180 -19.2% -67.0% IBNR Reserve 137,500 82,500 63,905 137,500 76,585 80,337 -44.3% 4.9% 20 General Ledger Code Details Revenues GL Account Code Account Description Actual 2020 2021 Projected 2022 2022 Budget 2023 2024 FN503200-361110 Investment Interest $ 8,751 $ 405 $ 439 $ 1,000 $ 500 $ 500 FN503200-361320 Unrlzd Gain(Loss)-Investments 12,880 - - - - - FN503200-369700 Trust Contributions -Employer 254,868 270,249 295,755 435,000 350,000 399,000 Total Operating Revenues Prescription Claims 276,499 270,654 296,194 436,000 350,500 399,500 FN503200-525503 Vision Claims 4,349 4,727 2,553 8,000 6,159 6,394 Total Revenues Stop Loss Reimbursements $ 276,499 $ 270,654 $ 296,194 $ 436,000 $ 350,500 $ 399,500 Expenses GL Account Code PW103100-511000 PW103100-512000 PW103100C-511000 PW103100C-513000 PW103800C-511000 Account Description Salaries Extra Labor Salaries Overtime Salaries Actual 2020 2021 Projected 2022 2022 Budget 2023 2024 Total Salaries & Wages - - - - - - FN503200-525500 Self Insured Medical Claims 92,323 76,374 42,727 150,000 129,948 135,731 FN503200-525501 Dental Claims 40,400 38,883 10,220 50,000 60,201 64,505 FN503200-525502 Prescription Claims 111,563 109,852 47,599 140,000 102,429 104,478 FN503200-525503 Vision Claims 4,349 4,727 2,553 8,000 6,159 6,394 FN503200-525504 Stop Loss Reimbursements - 3,403 - - - - FN503200-525506 TPA Admin Fees 15,914 16,106 5,746 18,000 17,218 17,734 FN503200-525507 Excess Loss Premiums 12,369 14,285 5,062 20,000 17,341 19,942 FN503200-525508 Long Term Care 10,385 11,819 98,229 15,000 15,000 15,000 FN503200-525510 IBNR Adjustment - - - 500 - - FN503200-525520 Out of Pocket Costs 31,297 5,939 8,214 30,000 78,000 78,000 FN503200-525521 Medicare Plan B 56,357 49,684 68,136 48,000 - - Total Personnel Benefits 374,959 331,071 288,486 479,500 426,296 441,784 FN503200-541000 Professional Services - - 1,750 5,000 - - FN503200-541007 Contracted Services - - - - 5,000 5,000 FN503200-549000 Miscellaneous Expenses - - - 500 - - FN503200-549999 Other Miscellaneous Expenses - - - - 500 500 Total Services & Passthrough Pmts - - 1,750 5,500 5,500 5,500 FN503200-750190 Transfer Out ICA - 11,920 12,040 12,040 12,642 13,274 Total Transfers Out - 11,920 12,040 12,040 12,642 13,274 Total Expenses $ 374,959 $ 342,991 $ 302,276 $ 497,040 $ 444,438 $ 460,558 21