Agenda 09/25/2012 Item #16E2 y/25/2U12 Item 16.E.2.
EXECUTIVE SUMMARY
Recommendation to approve a budget amendment in the amount of $2,890,000 from
Fund 517, Group Health and Life Insurance Reserves, to pay anticipated claims
expenses for the remainder of FY 2012.
OBJECTIVE: To ensure adequate funds are available to pay anticipated claims expenses for the
remainder of FY 2012.
CONSIDERATIONS: Pursuant to Florida Statutes 112.08, the Risk Management Department
administers a partially self-funded group health insurance program for the County's eligible
employees and dependents. Actual paid claims cost has been higher than the forecast claims
budget in fiscal year 2012 due to eleven catastrophic claims at the close of FY 2011 that continued
into the 2012 fiscal year. Paid claims for these members have exceeded $3,200,000 in FY 12.
Paid claims in FY 2012 are expected to be approximately $30,350,000. The claims budget is
$27,460,000. Therefore, a budget amendment of $2,890,000 is needed to pay expected claims
through the end of the fiscal year.
In order to protect the Health Fund against catastrophic losses, specific excess insurance is
purchased. Specific excess coverage contains a $325,000 self-insured retention per covered
member per year. The Health Fund is reimbursed for paid losses that exceed the self-insured
retention. There is no lifetime limit. Through August 2012, $2,052,000 in reinsurance proceeds have
been received from the County's excess insurance carrier.
FISCAL IMPACT: The budget for insurance claims will be increased by $2,890,000 to facilitate
payment of claims through year end. Funds are available in Fund 517, Group Health and Life
reserves to cover these expenditures. The budgeted reserve balance is $13,732,900. A portion of
reserves will be replenished by reinsurance proceeds in the amount of$2,052,000.
GROWTH MANAGEMENT IMPACT: There is no growth management impact associated with this
item.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney's Office, requires
majority vote, and is legally sufficient for Board action. —CMG
RECOMMENDATION: That the Board approves a budget amendment to Fund 517, Group Health
and Life Insurance, in the amount of $2,890,000 to fund anticipated claims expenses for the
remainder of FY 2012.
PREPARED BY: Jeffrey A. Walker,CPCU, ARM, Director, Department of Risk Management
Packet Page -2787-
9/25/2012 Item 16.E.2.
COLLIER COUNTY
Board of County Commissioners
Item Number: 16.E.2.
Item Summary: Recommendation to approve a budget amendment in the amount of
$2,890,000 from Fund 517, Group Health and Life Insurance Reserves, to pay anticipated claims
expenses for the remainder of FY 2012.
Meeting Date: 9/25/2012
Prepared By
Name: WalkerJeff
Title: Director-Risk Management,Risk Management
9/4/2012 2:50:47 PM
Approved By
Name: pochopinpat
Title: Administrative Assistant.Facilities Management
Date: 9/7/2012 2:30:32 PM
Name: PriceLen
Title: Administrator, Administrative Services
Date: 9/13/2012 10:26:00 AM
Name: GreeneColleen
Title: Assistant County Attorney,County Attorney
Date: 9/13/2012 12:12:17 PM
Name: KlatzkowJeff
Title: County Attorney
Date: 9/14/2012 10:17:41 AM
Name: FinnEd
Title: Senior Budget Analyst, OMB
Date: 9/17/2012 9:35:40 AM
Name: OchsLeo
Title: County Manager
Date: 9/17/2012 2:59:58 PM
Packet Page -2788-
9/25/2012 Item 16.E.2.
Packet Page -2789-