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OVERVIEW OF THE SELF INSURANCE FUND

The Self-Insurance Fund is an internal service fund established July 27, 1987. This fund pays for city-wide
expenses related to medical coverage for employees, retirees and dependents, workers’ compensation
coverage, property and casualty coverage, life insurance and all administrative expenses associated with the
City’s self-insurance program. Revenues come from charges to other City funds, employee and retiree insurance
premiums, and reimbursement from insurance carriers such as medical stop loss or for property losses.

The total Self-Insurance Fund budget for 2018/2019 is $15,058,070. Of the total, 83.2% is for health and medical
expenses including prescription costs, 3.3% for personnel expenses, 4.0% for workers’ compensation expenses,
and 5.9% for other insurance related expenses.

To help slow the growth of the City’s health insurance costs, significant changes to the health plan were made
in plan year 2018 to include: eligibility requirements for the retiree health plan changed to a rule based system
as well as a minimum retirement age of 55 was adopted; individual deductibles and out-of-pocket maximums
increased by $1,000 and $2,000 respectively on the City’s high deductible health plan (HRA); copays were
increased to encourage use of Tier 1 providers on the traditional health plan; on both plans, co-insurance for
out-of-network lab and imaging services was reduced to 50%; and the City introduced a Dental Health
maintenance Organization in conjunction with our traditional dental plan. For the first time in several years, the
City’s health insurance expenses are expected to finish under budget for FY 2017/2018.

Additional plan design changes will be made in plan year 2019 to include: Traditional Plan Non-Tier 1 provider
co-pays will be eliminated and replaced with co-insurance to encourage the use of Tier 1 providers, and
Traditional Plan deductibles and out-of-pocket maximums will increase $500. As we do each year, HR staff met
with the City’s compensation and benefits committee (made up of 12 employees from a variety of departments)
to discuss the proposed changes to the City’s health plan. Options were discussed and committee members
input was sought before finalizing our recommendation.

The City will continue to aggressively implement wellness programs to help slow the increase in our health
insurance costs. This year’s wellness strategy once again includes the “NRH Can Do Wellness” program utilizing
an online portal to track participant health and wellness activities such as annual health screenings or exercise.
On-going wellness initiatives include, skin cancer screenings, biometric screenings, a weight loss and fitness
program, health and benefits fair, and annual flu shots for employees, retirees and dependents.

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