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24 <br /> 1 families. Each year, the Board of Commissioners is asked to review and approve health and <br /> 2 dental insurance rates in advance of the annual budget so that open enrollment can be <br /> 3 completed prior to the beginning of the plan year which starts on July 1. <br /> 4 <br /> 5 Health Insurance <br /> 6 Since the Board of County Commissioners approved Orange County's participation in the North <br /> 7 Carolina Health Insurance Pool in FY 2018-19, the County has maintained the same monthly <br /> 8 premium equivalent rates for health insurance and dental coverage for employees and pre-sixty- <br /> 9 five retirees based on stable claims experience. <br /> 10 <br /> 11 Funding for the health plan is based on estimated premium equivalents rates that are necessary <br /> 12 to pay for incurred claims, administrative costs and expected liability of claims incurred but not <br /> 13 yet reported (IBNR). The plan also carries a reserve balance which ensures the County's ability <br /> 14 to pay claims. A reserve policy or the fund ratio target should range between 1.5 and 3.0 over <br /> 15 IBNR to ensure the ability to pay for future claims based on current claims experience which <br /> 16 currently have been higher than expected. The current fund ratio is 1.9 through January 2022. <br /> 17 In FY2022-23, that reserve amount is recommended to be 2 to 2.5X of expected IBNR liability. <br /> 18 <br /> 19 In the current fiscal year, the Health Insurance plan experienced an increase in the overall <br /> 20 number of claims, higher costs per claim, and two very high-cost claims. Although the plan is <br /> 21 projected to have a positive year-end balance of $1,380,254, additional funding is necessary to <br /> 22 cover projected total plan costs for FY 2022-23 and to build reserve levels for future <br /> 23 sustainability of rates. The actuarial analysis conducted by the North Carolina Health Insurance <br /> 24 Pool is recommending an increase of five percent (5%). <br /> 25 <br /> 26 The Manager recommends that the County assumes 100% of the recommended 5% increase <br /> 27 and that the employee contribution continues at current rates. This represents a total budget <br /> 28 increase of$626,813. <br /> 29 <br />