The Board of County Commissioners had one last hurrah in December, in the form of a last-minute, New Year’s Eve meeting concerning the county’s Employee Benefit Trust Fund.
The BoCC approved loaning $203,000 from the General Fund Reserve to the Employee Benefit Trust to cover unanticipated medical costs for the county workforce in 2009.
The county is partially self-insured, and both the county and its employees contribute to the Employee Benefit Trust, which then covers medical expenses up to $40,000 per person. For amounts exceeding the $40,000, the county works with an outside stop-loss carrier.
The loan was necessary when the county was informed on Dec. 28 that they owed an additional $203,000 to the county’s stop-loss insurance carrier in 2009, over the $121,000 they were already aware of, County Administrator Greg Schulte explained.
“We had an extraordinary amount of costs, bills, come in at the end of the year, far more than we anticipated,” Schulte said.
Because the expenses occurred in 2009, the carrier had to be paid in the same calendar year, prompting the New Year’s Eve meeting.
“We could not risk giving the insurance opportunity to deny our claim based upon a non-timely release,” Schulte said. “So we were stuck.”
The loan will be repaid with an interest rate of 2.75 percent.
The county will also be reimbursed for about $160,000 from the stop-loss carrier, probably in February, Schulte added. The amount reimbursed is dependent upon how many people exceed the $40,000 coverage amount for the year.
More county employees had serious illnesses than the year before, with nine people exceeding the $40,000 cap, Schulte said. The county averages five or six people per year exceeding the amount.
“You don’t know who’s going to be sick and what the nature of the illness is going to be and the timing of their treatment,” Schulte said, adding, “This year was definitely outside the bell curve on the number of people.”
Before being notified of the final total and the required last-minute payment, the county had already changed its plan with the stop-loss carrier to allow for additional time to pay for costs that “bleed over” the end-of-the-year deadline.
“Even if we had more expenses next year, we wouldn’t have to go through the fire drill of doing this on Dec. 31,” said Schulte.
The county is also facing the reality that higher medical costs could become the norm.
“It’s kind of a lesson learned for the county, in that we have to acknowledge that the demographics of our workforce are such that we’re going to have to start planning for increased costs,” Schulte said.
According to a survey done by the county’s health benefit advisor, the average age of county employees is 45, and the average age, including dependents, is 37, Schulte noted.
“The bottom line is that this is going to be an issue that is going to become more pronounced for us,” Schulte said, adding, “We don’t have a lot of young people that enter into the workforce.”