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AGENDA ITEM REVIEW FORM |
3.G.
Special Employee Benefit Trust Board Meeting
- Meeting Date:
- 05/04/2023
- Department Head:
- Adela Cortez
- Submitted By:
- Maria Barajas Gutierrez, Human Resources Coordinator, Human Resources Department
ITEM:
Discussion and possible action on any and all matters regarding benefit trust fund reserves. (Monica Castro, Director of Finance)
SUMMARY:
The Employee Benefit Trust Fund is composed of ongoing contributions (insurance premiums) made by the City and Employees to pay health-related claims. Distributions from the Fund are made throughout the fiscal year to pay medical and dental claims. Claims are not always the same. There are years when claims are high, and most of the contributions are used. There are other years when the claims are low, and all contributions are not used, thus building reserves in the Fund. It is customary to maintain reserves of approximately six (6) months of the total annual contributions, which according to our annual claims, would be equivalent to approximately 1.9 million. The Fund currently has 4 million in reserves.
The cost of health insurance increases every year. During the last three (3) years, the City of San Luis has not increased the employer or the employee premiums. Due to a number of high claims this year, we anticipate that 3.9 million will be required to cover claims for FY 2024. Employer and employee contributions will not cover the estimated expenses. City of San Luis Administration has decided to use reserve funds to cover any difference between the total contributions and the estimated expenses.
The cost of health insurance increases every year. During the last three (3) years, the City of San Luis has not increased the employer or the employee premiums. Due to a number of high claims this year, we anticipate that 3.9 million will be required to cover claims for FY 2024. Employer and employee contributions will not cover the estimated expenses. City of San Luis Administration has decided to use reserve funds to cover any difference between the total contributions and the estimated expenses.
RECOMMENDATION / SUGGESTED MOTION:
I MOVE TO APPROVE UTILIZATION OF THE EMPLOYEES BENEFITS TRUST FUND RESERVES TO COVER THE INCREASE OF HEALTH INSURANCE PREMIUMS.