Page 154 - NRH FY20 Approved Budget

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 2019/2020 is $15,788,103. Of the total, 84% is for health and medical
expenses including prescription costs, 3.2% for personnel expenses, 3.7 % for workers’ compensation expenses,
and 4.3% for other insurance related expenses.

To help slow the growth of the City’s health insurance costs, changes to the health plan were made in plan year
2019 to include: Traditional Plan Non-Tier 1 provider co-pays were eliminated and replaced with co-insurance to
encourage the use of Tier 1 providers, and Traditional Plan deductibles and out-of-pocket maximums were
increased $500. These changes, along with good claims experience, helped in keeping the medical plan under
budget for FY 19-20. The savings as a result of the positive plan performance were transferred into fund balance.

Based on our medical claims experience and market trend, we are forecasting a slight cost increase for plan
year 2020, but we are not proposing any plan design changes. City staff has built into the budget a 5% increase
to the City’s contribution towards medical expenses, and employees will be expected to share in that increase
with a similar increase to their monthly medical premiums. 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
ongoing performance of the City’s health plan and wellness initiatives.

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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