Quarterly Financial Report
Third Quarter of FY 2021-2022
Health Plan Fund Current Financial Condition
Health Plan Fund accounts for transactions of a self-insured health insurance plan (health, RX, and dental) for City employees, retirees, and dependents.
The Health Plan Fund third quarter financial report reflects an ending undesignated fund balance of $4.87 million, which represents approximately 11 months of the Health Plan Fund 2022 budgeted operating expenses ($3.5 million in excess reserve – above the 3-month minimum fund balance reserve policy). The projected ending fund balance is 24 percent or $954K higher than the amended year-end fund balance of $3.9 million.
At the end of the third quarter, revenues exceed expenses by $1.0 million, mainly due to medical claims coming in below budget.
Revenues vs Expenses
- Revenues are projected to come in over budget due to the net effect of retiree premiums, drug rebates, and interest income coming in over budget and employee premiums coming in under budget.
- Contractual Services are coming in under budget due to claims administration fees.
- Health Expenses are coming in under budget due to retiree and stop loss premiums.
- City's Premiums and Employee Premiums are coming in under budget due to enrollment.
- Retiree Premiums are coming in under budget due to participants.
- Other Financing Sources is coming in under budget. The OPEB Trust transfer was made in February 2022.
- Miscellaneous is coming in over budget due to a refund for prior fiscal year excess payments.
- Contractual Services are coming in over budget due to the professional services line item. Annual contracts are encumbered at the beginning of the fiscal year.
- Other Charges is coming in over budget. The contribution to the OPEB Trust was made in February 2022.
- Health Expenses are coming in under budget due to retiree claims.
Budget Amendments
As of the second quarter of FY 2021-22, the Health Fund budget has been amended for the FY 2020-21 carryover encumbrances in the amount of $6K (these encumbrances were not included in this financial report since the funding for the FY 2020-21 encumbrances will come from prior years reserved working capital balance of $6K).