Agenda 09/24/2024 Item #16E1 (Budget Amendment to Fund 5017 (Group Health and Life Insurance), to pay Health and Pharmacy claims expenditures for the remainder of FY 2024)9/24/2024
Item # 16.E.1.
ID#: 2024-1134
Executive Summary
Recommendation to approve a Budget Amendment to Fund 5017 (Group Health and Life Insurance), to pay health and
pharmacy claims expenditures for the remainder of FY 2024.
OBJECTIVE: To transfer funds from Insurance Reserves to Group Health Insurance Claims in Fund 5017 (Group
Health and Life Insurance) to ensure sufficient resources are available to cover health and pharmacy claims expenditures
for the remainder of FY 2024.
CONSIDERATIONS: The Board of Commissioners sponsors a partially self-funded Group Health Insurance Plan for
the County Manager’s Agency employees and the participating Constitutional Officer Agencies. The County utilizes the
services of Willis Towers Watson as its consulting benefits brokerage and actuarial firm. Claims under the program are
adjudicated by the County’s third-party claims administration company, Allegiance Benefit Plan Management, Inc.
Reinsurance or “Stop Loss” coverage is purchased through SunLife to protect the Plan against catastrophic claims.
Utilization Review, Concurrent Stay, Managed Care, and Provider Network services are provided through Community
Health Partners, Inc. The Risk Management Director is the Plan Administrator for the Plan.
During the third quarter of the fiscal year, claims volume and claims cost increased significantly because of several
factors. These include an increase in the frequency and severity of cancer and cardiac disorder claims, a rise in the cost
of specialty pharmacy medications (with one medication contributing to more than a 20% increase in total spending for
the first half of the plan year), and an overall inflationary increase in medical and pharmaceutical costs.
Fund 5017 (Group Health and Life Insurance) maintains reserves to comply with Florida Department of Insurance
statutory funding requirements to protect against unforeseen events such as those described above. Therefore, an
additional $5,000,000 is requested to cover the cost of group health and pharmacy claims through the end of FY 2024.
This recommendation has been reviewed by the County’s Benefits and Actuarial Consultant, Willis Towers Watson,
with their concurrence. Funds may only be used for health and pharmacy claims expenditures and cannot be put towards
any other purpose. Unspent funds, if any, will be returned to Fund 5017, Reserves for Insurance.
FISCAL IMPACT: A budget amendment is requested to move $5,000,000 in Fund 5017 (Group Health and Life
Insurance), from Reserves (5017-919010-996300) to Operating (5017-121640-645920). The health claims budget for
FY 2024 is currently $48,465,000. The requested budget amendment will increase the claims budget by approximately
10.3%, raising it to $53,465,000. Fund Reserves will remain sufficient to meet statutory requirements.
GROWTH MANAGEMENT IMPACT: There is no Growth Management Impact associated with this action.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, is approved as to form and
legality and requires a majority vote for approval. -JAK
RECOMMENDATIONS: To approve the attached Budget Amendment to Fund 5017 (Group Health and Life
Insurance), to pay health and pharmacy claims expenditures for the remainder of FY 2024.
PREPARED BY: Sonja Sweet, Manager, Risk Management
ATTACHMENTS:
1. Sept 2024 BA Request for 5017
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