Agenda - 05-09-2013 - 2 - Laserfiche WebLink

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Health Insurance The County pays approximately $6.6 million for health insurance across all funds for employees ($5.5 million for the General Fund) each fiscal year. Additionally, the County pays approximately $1.4 million (on a pay as you go basis) per year for all retiree health insurance related costs. For the upcoming budget year, Mark III Benefits and United Healthcare have informed us that we can expect up to an 8.5% increase in health insurance for employees and retirees for the fiscal year ending June 30, 2013. We estimate the increase and the effect on the FY2013 -14 budget to be as follows: • Employee health insurance • Retiree health insurance • Total $.23 million .50 million $73 million We anticipate, based on past experience that our health insurance costs will continue to increase by 10 to 15 percent per year as a result of claims paid in previous fiscal years, and the current average age of the County's workforce. This would represent an increase of $1.1 million to $1.5 million per year in health insurance for current employees and retirees. In the next few months, staff and County insurance consultants will bring forth proposals from which the Board of County Commissioners can select an appropriate course of action. This will be a difficult decision for the Board. Other Post - Employment Benefits (Retirees Health Insurance Funding) As previously discussed, the County currently funds post - employment benefits /retirees' health insurance (OPEB) on a pay -as- you -go basis. Our required annual actuarial contribution is approximately $5.3 million per year. As a result, this leaves the County with a funding deficit and an unfunded OPEB liability of $63.7 million, as of June 30, 2012. Putting this in perspective, last fiscal year we issued debt to fund an elementary school, equipment, and refund existing County debt that totaled $58.9 million that represented the County's largest, most current, combined debt issuance. We must continue to address this issue, it can and will, impact discussions with the bond rating agencies, impact our bond rating and the ability of the County to issue debt in the future. In this fiscal year, we provided $3,000,000 in additional funding to fund the annual required contribution. Additionally, as previously mentioned, the annual cost is increasing proportionately to the number of retirees. Emergency Services Emergency Services (911 and ES) requested an increase of approximately $1.78 million in FY2013 -14. These increases address the recommendations of the Emergency Services Work Group and the consultant's report received during the fall of this year. The final allocations may be adjusted based on input, but considering the importance of these services to the public, necessary increased financial commitments will be a reality.