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HomeMy WebLinkAboutItem #2 Health Plan Trust ContributionROY & ASSOCIATES, INC. Consulting Actuaries 3115 East Lion Lane, Suite 160 Salt Lake City, Utah 84121 (801) 272-4777 FAX (801) 272-4791 August 27, 2025 Mr. Scott Gummersall, Director of Human Resources City of Chubbuck 5160 Yellowstone Ave. Chubbuck, ID 83202 RE: City of Chubbuck Self -Funded Medical Plan Proformas and Contribution Certification for the 10/1/2025 to 9/30/2026 Plan Year Scott: Per your request, we have prepared a 15 -month proforma financial statement (balance sheet including projected reserves and income statement) and contribution certification for the period ending 9/30/2026 for the City of Chubbuck Health Plan Trust. This certification includes the new recommended contribution rates to be effective 10/1/2025. In accordance with Idaho Code Section 41-4004(2)(a), this certification should be filed with the Idaho Department of Insurance no later than August 31, 2025. In accordance with the Idaho Code, we recommend that you also file copies of any changes in your third party administrative services agreement, stop loss reinsurance agreements or other contracts and agreements with the Idaho Department of Insurance with this certification. If those agreements are not currently ready, we recommend that you submit a copy of your acceptance of the Blue Cross of Idaho proposal until the agreements are ready. It is our understanding that other than regular updates in premium amounts, aggregate stop loss attachment points, administrative charges and expected professional fees, there have been no changes in plan benefits and provisions, reinsurance agreements, administrative service agreements, or consulting and professional agreements from the corresponding arrangements for the 10/1/2024 to 9/30/2025 plan year. It is expected that on a best estimate claims cost basis there will be no change in the surplus. Surplus is projected to be $1,143,000 at the end of the next plan year with the proposed contribution rate increases as shown in the proformas. We have included the following exhibits: • Exhibit 1 - Proforma Balance Sheet - Best Estimate Claims Cost Exhibit 2 - Proforma Surplus Reconciliation and Surplus Adequacy - Best Estimate Claims Cost • Exhibit 3 - Proforma Income Statement - Best Estimate Claims Cost • Exhibit 4 - Proforma Balance Sheet - Aggregate Stop Loss Attachment Claims Cost • Exhibit 5 - Proforma Surplus Reconciliation and Surplus Adequacy - Aggregate Stop Loss Attachment Claims Cost • Exhibit 6 - Proforma Income Statement - Aggregate Stop Loss Attachment Claims Cost • Exhibit 7 - Projection of 9/30/2026 IBNR Reserve • Exhibit 8 - Projected Claims Costs -10/1/2025 to 9/30/2026 • Exhibit 9 -Projected Expenses -10/1/2025 to 9/30/2026 • Exhibit 10 - Contribution Certification - Based on Aggregate Stop -loss Attachment Point Claims Costs • Exhibit 11- Contribution Certification - Based on Projected Claims Costs We recommend the following monthly plan contribution rates for the 10/1/2025 to 9/30/2026 plan year: Based on the analysis provided below, we have determined that the recommended contribution rates are reasonable and provide a margin for adverse experience and all costs of operations. The recommended contribution rates are neither inadequate or excessive nor unfairly discriminatory. They are appropriate for the classes of risk for which they have been computed. The emerging costs will vary from those presented in these exhibits to the extent that actual experience differs from that projected by the actuarial methods and assumptions employed in preparing this certification. The full amount of these contributions is to be paid by the employer. There is no employee participation anticipated in the contribution rate. Coverage Prior Monthly Contribution Rate Monthly Contribution Rate Effective 10%1/2025 Percentage Increase Employee Only 693.75 797.81 15.0% Employee and Spouse 1,331.48 1,531.20 15.0% Employee and Children 1,214.54 1,396.72 15.0% Family 1,769.90 2,035.39 15.0% Overall Rate Increase 15.0% Based on the analysis provided below, we have determined that the recommended contribution rates are reasonable and provide a margin for adverse experience and all costs of operations. The recommended contribution rates are neither inadequate or excessive nor unfairly discriminatory. They are appropriate for the classes of risk for which they have been computed. The emerging costs will vary from those presented in these exhibits to the extent that actual experience differs from that projected by the actuarial methods and assumptions employed in preparing this certification. The full amount of these contributions is to be paid by the employer. There is no employee participation anticipated in the contribution rate. Data, Methods, Assumptions and Analysis The plan's surplus at 6/30/2025 of $1,183,429 is significantly higher than the $450,000 of required surplus. The plan administrator intends to hold back $100,000 of the October 2025 scheduled contribution under the new contribution schedule to reduce the excess surplus. We estimate that with that $100,000 contribution hold back, the plan income for the 2025/2026 plan year would be a loss of $88,605 so the plan will establish a contribution deficiency reserve on 9/30/2025 of $88,605 to cover that loss. That contribution deficiency reserve will be released in October 2025 to offset the majority of the $100,000 contribution hold back and results in $0 of projected earnings for the plan year under the best estimate claims cost basis as shown in Exhibit 3. The attached Exhibit 1 shows the proforma balance sheet using the projected claims costs developed in Exhibit 8. The proforma balance sheet uses as its starting point the preliminary 6/30/2025 trust financial statements. The IBNR at 6/30/2025 of $195,444 is increased to the amount shown in Exhibit 7 over the remaining 15 -month projection period. It also shows the contribution deficiency reserve described above. It is assumed that other than the IBNR amounts all claims and expenses are paid as presented so there are no unpaid claims or expenses shown other than the continuation of those amounts shown at 6/30/2025. Surplus decreases to $1,143,496 as of 9/30/2025 and then remains at that level through 9/30/2026. Exhibit 2 shows the reconciliation of surplus over the projection period. It also shows the calculation of the minimum required surplus. Due to the increase in the aggregate stop loss attachment point, the contribution rates based on the best estimate claims costs are about 6% less than the contribution rates based on the aggregate stop loss attachment points. As shown in Exhibit 2, under the minimum surplus Method 2, the minimum surplus requirement for the 2025/2026 plan year is approximately $30,000 since the recommended contribution rates are slightly lower than the aggregate stop loss attachment points. We recognize the Department of Insurance will require the use of $549,807 under Method 1 since the aggregate stop loss agreement does not include a three month runoff period. It is still helpful to note the favorable results under Method 2. As shown in Exhibit 2, there is sufficient surplus in all months to cover the minimum surplus requirement under Method 1. Exhibit 3 is the 15 -month income statement proforma using the certified contribution rates shown in Exhibit 10. Claims costs are based on the projected claims costs developed in Exhibit 8. The specific and aggregate stop loss premiums expense is calculated using the respective stop loss premiums shown in Exhibit 10 multiplied by the projected number of employees in each coverage class also as shown in Exhibit 10. The number of employees is assumed to start at 108 and increase to 115 over the projection period. The other expenses are as shown in Exhibit 9. As noted above, $100,000 in contributions is held back in October 2025 and offset by a release of the contribution deficiency reserve of $88,605 resulting in a projected income of $0 for the new plan year. Exhibits 4, 5 and 6 are the corollaries to Exhibits 1, 2 and 3 with the claim costs in Exhibits 4, 5 and 6 being based on the aggregate stop loss attachment points. Under this scenario the plan has end of plan year surplus of $988,765 compared to the surplus in Exhibit 1 of $1,143,496. In the highly unlikely case that claims increase to the aggregate stop loss attachment point level, the plan has more than adequate surplus to deal with the adverse deviation. c1 No interest is assumed to be earned on cash balances in any of the scenarios. Exhibit 7 shows the development of the 9/30/2026 IBNR reserve and also shows the increase in the reserve margin and claims settlement expense margin from the 6/30/2025 IBNR reserve certification. The claims completion factors are the same as those used in the 6/30/2025 IBNR reserve certification. Exhibit S shows the development of the projected 10/1/2025 to 9/30/2026 claims costs. The IBNR amounts do not include the 25% margin or the administrative costs of the claims runoff included in the financial statement IBNR. The methodology rolls the current estimated claims costs forward at the documented trend rates. The claim costs are then allocated to coverage class using the specific stop loss premium ratios from the 2019/2020 plan year. These same ratios are used to allocate the current year specific stop loss premiums and aggregate stop loss attachment points to the different coverage classes. The experience from the prior plan year is also included in the analysis. Exhibit 9 provides the projected expenses for the 10/1/2025 to 9/30/2026 plan year. The Blue Cross of Idaho fee is based upon the Blue Cross of Idaho TPA contract. The other projected expenses are self explanatory and have changed little from the prior year. Exhibits 10 and 11 illustrate the development of the 10/1/2025 to 9/30/2026 contribution rates. The recommended rates are highlighted in yellow in the middle of the page. The proposed contribution rates based on best estimate claims (Exhibit 11) contain a margin of .3% for adverse claim deviation. Should claims reach the aggregate stop loss attachment point (Exhibit 10), they will be deficient by 6.7%. It is our understanding that the Trust will maintain specific stop loss coverage for claim amounts in excess of $50,000 for claims incurred during the current and prior plan year and paid within the plan year. The Trust will also maintain aggregate stop loss reinsurance at the attachment points shown in Exhibit 10 for claims incurred in the current and prior plan year and paid within the plan year. Reliance In completing this analysis, we have relied on data which includes but is not limited to paid claims information, stop loss rates, contract administration rates, projected administrative expenses, membership data, summary plan descriptions, reinsurance contracts, and other information provided by Blue Cross of Idaho, Intermountain Insurance Services and the City of Chubbuck. We have not audited the data but have reviewed the data for reasonableness and consistency. It is likely that actual experience will be different from the assumptions used in these calculations, resulting in actual results being different from projected results. To complete our work, we take input (the data provided along with selected actuarial assumptions) and process that information using computer programs and calculations which then generate the output or valuation results provided in this report. This process is considered a model under Actuarial Standard of Practice No. 56 - Modeling. The purpose of this model and its calculations is to provide recommended contribution rates for the City of Chubbuck Health Plan Trust. We believe the actuarial assumptions used in completing this model are consistent with one another. We find the output of the model to be reasonable and are not aware of any model limitations or weaknesses. We have completed this work ourselves and have not relied on models developed by others or other experts unless otherwise disclosed in this report. Conclusion I am a Fellow of the Society of Actuaries, a Member of the American Academy of Actuaries and meet the Qualification Standards of the American Academy of Actuaries, including education and experience requirements, to render the actuarial opinion contained herein. The calculations reflected in this report have been made on a basis consistent with our understanding of the Code of Professional Conduct of the American Academy of Actuaries, and relevant Actuarial Standards of Practice of the Actuarial Standards Board. We find the assumptions used for measurements are reasonable and appropriate for the purposes for which they have been used. Should you or others have any questions regarding the information presented in this letter and attachments, please don't hesitate to email or call me at 385-290-2723. Sincerely, Kent H. Cannon, FSA, MAAA Principal cc: Carlos Aponte, Intermountain Insurance Services Exhibit 1 City of Chubbuck Self-funded Medical Plan Proforma Balance Sheet - Best Estimate Claims Cost City of Chubbuck Self-funded Medical Plan Jun -25 Jul -25 Aug -25 Sep -25 Oct -25 Nov -25 Dec -25 Jan -26 Feb -26 Mar -26 Apr -26 May -26 Jun -26 Jul -26 Aug -26 Sep -26 Balance Sheet Assets Cash on hand and on deposit 1,552,946 1,573,046 1,593,305 1,609,087 1,511,133 1,515,530 1,519,926 1,520,715 1,525,179 1,529,712 1,532,362 1,537,013 1,541,664 1,544,314 1,545,465 1,550,116 Certificates of deposit - - - - - - - - - - - - - - - - Short-term investments - - - - - - - - - - - - - - - - Accountsforanyotherinvestedassets, ifany - - - - - - - - - - - - - - - - Other invested assets - - - - - - - - - - - - - - - - Subtotal - cash and invested assets 1,552,946 1,573,046 1,593,305 1,609,087 1,511,133 1,515,530 1,519,926 1,520,715 1,525,179 1,529,712 1,532,362 1,537,013 1,541,664 1,544,314 1,545,465 1,550,116 Uncollected contributions - - - - - - - - - - - - - - - - Interest and investment income due and accrued - - - - - - - - - - - - - - - - Stop Loss Receivable from carrier - - - - - - - - - - - - - - - - Prepaid Expenses - - - - - - - - - - - - - - - On deposit with TPA - - - - - - - - - - - - - - Other assets Total Assets 1,552,946 1,573,046 1,593,305 1,609,087 1,511,133 1,515,530 1,519,926 1,520,715 1,525,179 1,529,712 1,532,362 1,537,013 1,541,664 1,544,314 1,545,465 1,550,116 Liabilities Claims unpaid - - - - - - - - - - - - - - - - Incurred but not reported (IBNR) liability 197,880 200,397 202,913 205,349 207,866 210,302 212,818 215,335 217,608 220,125 222,561 225,078 227,513 230,030 232,547 - Unearned contributions - - - - - - - - - - - - - - - Stop Loss Premiums due but unpaid - - - - - - - - - - - - - - - - Claimadministrationfees/ TPA fees payable - - - - - - - - - - - - - - - - Taxesdueoraccrued - - - - - - - - - - - - - - - - ContributionDeficiencyReserve 88,605 - - - - - - - - - - - - Other liabilities 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 Total Liabilities 369,517 371,952 374,469 465,591 379,422 381,938 384,374 386,891 389,408 391,681 394,198 396,634 399,150 401,586 404,103 406,620 Surplus Additional Surplus Contribution - - - - - - - - - - - - - - - Unassigned earned/(lost) surplus 1,183,429 1,201,094 1,218,836 1,143,496 1,131,712 1,133,591 1,135,552 1,133,824 1,135,772 1,138,031 1,138,164 1,140,379 1,142,513 1,142,728 1,141,362 1,143,496 Total Surplus 1,183,429 1,201,094 1,218,836 1,143,496 1,131,712 1,133,591 1,135,552 1,133,824 1,135,772 1,138,031 1,138,164 1,140,379 1,142,513 1,142,728 1,141,362 1,143,496 Total Liabilities and Surplus 1,552,946 1,573,046 1,593,305 1,609,087 1,511,133 1,515,530 1,519,926 1,520,715 1,525,179 1,529,712 1,532,362 1,537,013 1,541,664 1,544,314 1,545,465 1,550,116 Exhibit 2 City of Chubbuck Self-funded Medical Plan Proforma Surplus Reconciliation and Surplus Adequacy - Best Estimate Claims Cost City of Chubbuck Self-funded Medical Plan Jun -25 Jul -25 Aug -25 Sep -25 Oct -25 Nov -25 Dec -25 Jan -26 Feb -26 Mar -26 Apr -26 May -26 Jun -26 Jul -26 Aug -26 Sep -26 Reconciliation of Surplus Specific stop loss exposure not applicable to aggregate Estimated total expenses (incl stop loss prem) 469,561 620,228 Estimated contributions 1,812,430 2,199,227 Difference (minimum of SO) 33,002 25,097 110% of difference 36,302 27,607 Total surplus, beginning of period 1,079,811 1,183,429 1,201,094 1,218,836 1,143,496 1,131,712 1,133,591 1,135,552 1,133,824 1,135,772 1,138,031 1,138,164 1,140,379 1,142,513 1,142,728 1,141,362 Total Net gain/ (loss) (63,008) 17,665 17,742 (75,340) (11,784) 1,880 1,961 (1,728) 1,947 2,259 134 2,215 2,134 215 (1,366) 2,134 Total surplus, end of period 1,016,803 1,201,094 1,218,836 1,143,496 1,131,712 1,133,591 1,135,552 1,133,824 1,135,772 1,138,031 1,138,164 1,140,379 1,142,513 1,142,728 1,141,362 1,143,496 Adequacy of Surplus Total surplus, end of period 1,016,803 1,201,094 1,218,836 1,143,496 1,131,712 1,133,591 1,135,552 1,133,824 1,135,772 1,138,031 1,138,164 1,140,379 1,142,513 1,142,728 1,141,362 1,143,496 Minimum required surplus 453,107 453,107 453,107 453,107 549,807 549,807 549,807 549,807 549,807 549,807 549,807 549,807 549,807 549,807 549,807 549,807 Excess (deficient) reserves 563,69 747,987 765,729 690,388 581,905 583,784 585,745 584,018 585,965 588,224 588,358 590,573 592,707 592,922 591,556 593,689 Calculation of Minimum Required Surplus (Plan Yr) Method 1 Average monthly contribution x three 453,107 549,807 Method 2 Aggregate dollar stop -loss attachment point 1,375,870 1,604,096 Excess claims over aggregate stop loss attachment point Specific stop loss exposure not applicable to aggregate Estimated total expenses (incl stop loss prem) 469,561 620,228 Estimated contributions 1,812,430 2,199,227 Difference (minimum of SO) 33,002 25,097 110% of difference 36,302 27,607 Method 1 453,107 549,807 Exhibit 3 City of Chubbuck Self-funded Medical Plan Proforma Income Statement - Best Estimate Claims Cost City of Chubbuck Self-funded Medical Plan Jun -25 Jul -25 Aug -25 Sep -25 Oct -25 Nov -25 Dec -25 Jan -26 Feb -26 Mar -26 Apr -26 May -26 Jun -26 Jul -26 Aug -26 Sep -26 Statement of Income Operating Revenue Contributions from Employer 1,348,342 153,790 155,121 155,177 180,489 180,489 180,489 181,287 181,287 182,085 185,517 185,517 185,517 185,517 185,517 185,517 Contribution Hold Back - - - - (100,000) - - - - - - - - - - - Stop Loss Recovered - - - - - - - - - - - - - - - - Other Revenue 27,264 Total Operating Revenue 1,375,605 153,790 155,121 155,177 80,489 180,489 180,489 181,287 181,287 182,085 185,517 185,517 185,517 185,517 185,517 185,517 Operating Expenses Claims Paid 1,372,578 91,771 92,560 92,509 119,017 119,017 119,017 119,486 119,486 119,956 122,231 122,231 122,231 122,231 122,231 122,231 Stop Loss Recoveries (249,521) - - Change in IBNR 65,706 2,436 2,517 2,517 2,436 2,517 2,436 2,517 2,517 2,273 2,517 2,436 2,517 2,436 2,517 2,517 Claims Incurred 1,188,764 94,207 95,077 95,026 121,452 121,533 121,452 122,003 122,003 122,229 124,748 124,667 124,748 124,667 124,748 124,748 Stop Loss coverage expense paid - specific 201,998 32,950 33,234 33,216 46,032 46,032 46,032 46,213 46,213 46,395 47,275 47,275 47,275 47,275 47,275 47,275 Stop Loss coverage expense paid -aggregate 1,982 2,000 2,019 2,362 2,362 2,362 2,383 2,383 2,405 2,447 2,447 2,447 2,447 2,447 2,447 Pharmacy Rebates (49,990) (2,000) (2,000) (2,000) (3,083) (3,083) (3,083) (3,111) (3,111) (3,139) (3,194) (3,194) (3,194) (3,194) (3,194) (3,194) Claims administration/TPA fees paid 51,241 5,676 5,729 5,782 6,073 6,073 6,073 6,128 6,128 6,182 6,292 6,292 6,292 6,292 6,292 6,292 Management/Professional Service fees paid 44,929 2,160 2,180 6,700 6,862 4,512 4,512 7,532 4,532 4,552 6,592 4,592 4,592 6,592 8,092 4,592 Taxes paid 1,172 1,066 1,076 1,086 1,096 1,096 1,096 1,781 1,106 1,116 1,135 1,135 1,135 1,135 1,135 1,135 ACA -PCORI Fee 500 83 84 85 85 85 85 86 86 87 89 89 89 89 89 89 Change in Contribution Deficiency Reserve - - 88,605 (88,605) - - - - - - - - - - - Other operating expenses Total Operating Expenses 1,438,613 136,125 137,379 230,517 92,273 178,610 178,528 183,014 179,339 179,826 185,383 183,302 183,383 185,302 186,883 183,383 Operating Gain (Loss) (63,008) 17,665 17,742 (75,340) (11,784) 1,880 1,961 (1,728) 1,947 2,259 134 2,215 2,134 215 (1,366) 2,134 Net Income (Loss) (63,008) 17,665 17,742 (75,340) (11,784) 1,880 1,961 (1,728) 1,947 2,259 134 2,215 2,134 215 (1,366) 2,134 Oct -24 to Oct -25 to Sept -25 Sep -26 1,812,430 2,199,227 - (100,000) 27,264 1,839,693 2,099,227 1,649,418 1,449,365 (249,521) - 73,175 29,634 1,473,073 1,478,999 301,397 560,566 6,000 28,941 (55,990) (37,778) 68,428 74,406 55,969 67,550 4,400 14,102 751 1,046 88,605 (88,605) 1,942,634 2,099,226 (102,941) 0 (102,941) 0 Exhibit 4 City of Chubbuck Self-funded Medical Plan Proforma Balance Sheet -Aggregate Stop Loss Attachment Claims Cost City of Chubbuck Self-funded Medical Plan Jun -25 Jul -25 Aug -25 Sep -25 Oct -25 Nov -25 Dec -25 Jan -26 Feb -26 Mar -26 Apr -26 May -26 Jun -26 Jul -26 Aug -26 Sep -26 Balance Sheet Assets Cash on hand and on deposit 1,552,946 1,573,046 1,593,305 1,609,087 1,498,427 1,490,118 1,481,808 1,469,841 1,461,549 1,453,275 1,442,877 1,434,478 1,426,080 1,415,682 1,403,783 1,395,385 Certificates of deposit - - - - - - - - - - - - - - - - Short-term investments - - - - - - - - - - - - - - - - Accountsforanyotherinvestedassets, ifany - - - - - - - - - - - - - - - - Other invested assets - - - - - - - - - - - - - - - - Subtotal - cash and invested assets 1,552,946 1,573,046 1,593,305 1,609,087 1,498,427 1,490,118 1,481,808 1,469,841 1,461,549 1,453,275 1,442,877 1,434,478 1,426,080 1,415,682 1,403,783 1,395,385 Uncollected contributions - - - - - - - - - - - - - - - - Interest and investment income due and accrued - - - - - - - - - - - - - - - - Stop Loss Receivable from carrier - - - - - - - - - - - - - - - - Prepaid Expenses - - - - - - - - - - - - - - - On deposit with TPA - - - - - - - - - - - - - - Other assets Total Assets 1,552,946 1,573,046 1,593,305 1,609,087 1,498,427 1,490,118 1,481,808 1,469,841 1,461,549 1,453,275 1,442,877 1,434,478 1,426,080 1,415,682 1,403,783 1,395,385 Liabilities Claims unpaid - - - - - - - - - - - - - - - - Incurred but not reported (IBNR) liability 197,880 200,397 202,913 205,349 207,866 210,302 212,818 215,335 217,608 220,125 222,561 225,078 227,513 230,030 232,547 Unearned contributions - - - - - - - - - - - - - - - - Stop Loss Premiums due but unpaid - - - - - - - - - - - - - - - - Claimadministrationfees/ TPA fees payable - - - - - - - - - - - - - - - - Taxes due or accrued - - - - - - - - - - - - - - - - ContributionDeficiencyReserve 88,605 - - - - - - - - - - - Other liabilities 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 174,073 Total Liabilities 369,517 1 371,952 1 374,469 1 465,591 1 379,422 1 381,938 1 384,374 1 386,891 1 389,408 1 391,681 1 394,198 1 396,634 1 399,150 1 401,586 1 404,103 1406,620 Surplus Additional Surplus Contribution - - - - - - - - - - - - - - - Unassigned earned/(lost)surplus 1,183,429 1,201,094 1,218,836 1,143,496 1,119,006 1,108,179 1,097,434 1,082,950 1,072,142 1,061,594 1,048,679 1,037,845 1,026,930 1,014,096 999,680 988,765 Total Surplus 1,183,429 1,201,094 1,218,836 1,143,496 1,119,006 1,108,179 1,097,434 1,082,950 1,072,142 1,061,594 1,048,679 1,037,845 1,026,930 1,014,096 999,680 988,765 Total Liabilities and Surplus 1,552,946 1,573,046 1,593,305 1,609,087 1,498,427 1,490,118 1,481,808 1,469,841 1,461,549 1,453,275 1,442,877 1,434,478 1,426,080 1,415,682 1,403,783 1,395,385 Exhibit 5 City of Chubbuck Self-funded Medical Plan Proforma Surplus Reconciliation and Surplus Adequacy - Aggregate Stop Loss Attachment Claims Cost City of Chubbuck Self-funded Medical Plan Jun -25 Jul -25 Aug -25 Sep -25 Oct -25 Nov -25 Dec -25 Jan -26 Feb -26 Mar -26 Apr -26 May -26 Jun -26 Jul -26 Aug -26 Sep -26 Reconciliation of Surplus Specific stop loss exposure not applicable to aggregate Estimated total expenses (incl stop loss prem) 469,561 620,228 Estimated contributions 1,812,430 2,199,227 Difference (minimum of SO) 33,002 25,097 110% of difference 36,302 27,607 Total surplus, beginning of period 1,079,811 1,183,429 1,201,094 1,218,836 1,143,496 1,119,006 1,108,179 1,097,434 1,082,950 1,072,142 1,061,594 1,048,679 1,037,845 1,026,930 1,014,096 999,680 Total Net gain/ (loss) (63,008) 17,665 17,742 (75,340) (24,490) (10,826) (10,745) (14,484) (10,809) (10,547) (12,915) (10,834) (10,915) (12,834) (14,415) (10,915) Total surplus, end of period 1,016,803 1,201,094 1,218,836 1,143,496 1,119,006 1,108,179 1,097,434 1,082,950 1,072,142 1,061,594 1,048,679 1,037,845 1,026,930 1,014,096 999,680 988,765 Adequacy of Surplus Total surplus, end of period 1,016,803 1,201,094 1,218,836 1,143,496 1,119,006 1,108,179 1,097,434 1,082,950 1,072,142 1,061,594 1,048,679 1,037,845 1,026,930 1,014,096 999,680 988,765 Minimum required surplus 453,107 453,107 453,107 453,107 549,807 549,807 549,807 549,807 549,807 549,807 549,807 549,807 549,807 549,807 549,807 549,807 Excess (deficient) reserves 563,696 747,987 765,729 690,388 569,199 558,373 547,627 533,144 522,335 511,788 498,872 488,038 477,123 464,289 449,874 438,958 Calculation of Minimum Required Surplus (Plan Yr) Method 1 Average monthly contribution x three 453,107 549,807 Method 2 Aggregate dollar stop -loss attachment point 1,375,870 1,604,096 Excess claims over aggregate stop loss attachment point Specific stop loss exposure not applicable to aggregate Estimated total expenses (incl stop loss prem) 469,561 620,228 Estimated contributions 1,812,430 2,199,227 Difference (minimum of SO) 33,002 25,097 110% of difference 36,302 27,607 Method 1 453,107 10 549,807 Exhibit 6 City of Chubbuck Self-funded Medical Plan Proforma Income Statement - Aggregate Stop Loss Attachment Claims Cost City of Chubbuck Self-funded Medical Plan Jun -25 Jul -25 Aug -25 Sep -25 Oct -25 Nov -25 Dec -25 Jan -26 Feb -26 Mar -26 Apr -26 May -26 Jun -26 Jul -26 Aug -26 Sep -26 Statement of Income Operating Revenue Contributions from Employer 1,348,342 153,790 155,121 155,177 180,489 180,489 180,489 181,287 181,287 182,085 185,517 185,517 185,517 185,517 185,517 185,517 Contribution Hold Back - - - - (100,000) - - - - - - - - - - - Stop Loss Recovered - - - - - - - - - - - - - - - - Other Revenue 27,264 Total Operating Revenue 1,375,605 153,790 155,121 155,177 80,489 180,489 180,489 181,287 181,287 182,085 185,517 185,517 185,517 185,517 185,517 185,517 Operating Expenses Claims Paid 1,372,578 91,771 92,560 92,509 131,723 131,723 131,723 132,242 132,242 132,762 135,280 135,280 135,280 135,280 135,280 135,280 Stop Loss Recoveries (249,521) - - ChangeinlBNR 65,706 2,436 2,517 2,517 2,436 2,517 2,436 2,517 2,517 2,273 2,517 2,436 2,517 2,436 2,517 2,517 Claims Incurred 1,188,764 94,207 95,077 95,026 134,158 134,239 134,158 134,759 134,759 135,035 137,797 137,716 137,797 137,716 137,797 137,797 Stop Loss coverage expense paid - specific 201,998 32,950 33,234 33,216 46,032 46,032 46,032 46,213 46,213 46,395 47,275 47,275 47,275 47,275 47,275 47,275 Stop Loss coverage expense paid -aggregate 1,982 2,000 2,019 2,362 2,362 2,362 2,383 2,383 2,405 2,447 2,447 2,447 2,447 2,447 2,447 Pharmacy Rebates (49,990) (2,000) (2,000) (2,000) (3,083) (3,083) (3,083) (3,111) (3,111) (3,139) (3,194) (3,194) (3,194) (3,194) (3,194) (3,194) Claims administration/TPA fees paid 51,241 5,676 5,729 5,782 6,073 6,073 6,073 6,128 6,128 6,182 6,292 6,292 6,292 6,292 6,292 6,292 Management/Professional Service fees paid 44,929 2,160 2,180 6,700 6,862 4,512 4,512 7,532 4,532 4,552 6,592 4,592 4,592 6,592 8,092 4,592 Taxes paid 1,172 1,066 1,076 1,086 1,096 1,096 1,096 1,781 1,106 1,116 1,135 1,135 1,135 1,135 1,135 1,135 ACA -PCORI Fee 500 83 84 85 85 85 85 86 86 87 89 89 89 89 89 89 Change in Contribution Deficiency Reserve - - 88,605 (88,605) - - - - - - - - - - - Other operating expenses Total Operating Expenses 1,438,613 136,125 137,379 230,517 104,979 191,316 191,234 195,771 192,096 192,632 198,432 196,351 196,432 198,351 199,932 196,432 Operating Gain (Loss) (63,008) 17,665 17,742 (75,340) (24,490) (10,826) (10,745) (14,484) (10,809) (10,547) (12,915) (10,834) (10,915) (12,834) (14,415) (10,915) Net Income (Loss) (63,008) 17,665 17,742 (75,340) (24,490) (10,826) (10,745) (14,484) (10,809) (10,547) (12,915) (10,834) (10,915) (12,834) (14,415) (10,915) 11 Oct -24 to Oct -25 to Sept -25 Sep -26 1,812,430 2,199,227 - (100,000) 27,264 1,839,693 2,099,227 1,649,418 1,604,096 (249,521) - 73,175 29,634 1,473,073 1,633,730 301,397 560,566 6,000 28,941 (55,990) (37,778) 68,428 74,406 55,969 67,550 4,400 14,102 751 1,046 88,605 (88,605) 1,942,634 2,253,957 (102,941) (154,731) (102,941) (154,731) Exhibit 7 City of Chubbuck Self-funded Medical Plan Projection of 9/30/2026 IBNR Reserve (1) Based on June 30, 2025 medical claims monthly completion factors from IBNR calculation. 12 Aug -25 Sep -25 Oct -25 Nov -25 Dec -25 Jan -26 Feb -26 Mar -26 Apr -26 May -26 Jun -26 Jul -26 Aug -26 Sep -26 9/30/2026 Total 6/30/2025 IBNR Change Monthly Employees Monthly Members Estimated Incurred Claims PMPM Estimated Incurred Claims Estimated Percentage Paid by 9/30/2026 (1) Estimated Portion Paid by 9/30/2026 109 335 351.53 117,762 0.999721 117,729 110 338 351.53 118,817 0.999462 118,753 111 341 351.53 119,871 0.996674 119,473 111 341 351.53 119,871 0.995506 119,332 111 341 351.53 119,871 0.992367 118,956 112 344 351.53 120,926 0.987445 119,408 112 344 351.53 120,926 0.982722 118,836 113 347 351.53 121,980 0.979806 119,517 115 354 351.53 124,441 0.976859 121,561 115 354 351.53 124,441 0.953091 118,604 115 354 351.53 124,441 0.898313 111,787 115 354 351.53 124,441 0.870221 108,291 115 354 351.53 124,441 0.743851 92,566 115 354 351.53 124,441 0.208022 25,887 Estimated IBNR as of 9/30/2026 33 64 399 539 915 1,518 2,089 2,463 2,880 5,837 12,654 16,150 31,875 98,555 175,971 144,108 31,863 Margin @ 25% 8 16 100 135 229 380 522 616 720 1,459 3,164 4,037 7,969 24,639 43,993 40,308 3,685 Estimated Administration Cost to Discharge the Reserve at 2 Months of Claims 12,583 12,583 11,028 1,555 Required IBNR Reserve at 9/30/2026 41 80 498 673 1,144 1,898 2,612 3,079 3,600 7,297 15,818 20,187 39,844 135,777 232,547 195,444 37,103 (1) Based on June 30, 2025 medical claims monthly completion factors from IBNR calculation. 12 Exhibit 8 City of Chubbuck Self-funded Medical Plan Projected Claims Costs -10/1/2025 to 9/30/2026 Plan: City of Chubbuck Renewal Period: 10/1/2025 to 9/30/2026 Experience Period: 10/1/2024 to 6/30/2025 13 Medical Rx Medical/Rx Enrollment Agg Stop Current Employees 108 108 108 Current Members 332 332 332 Experience Period Employee Months 954 954 954 Experience Period Member Months 2,989 2,989 2,989 Experience Period Average Members per Employee 3.13 3.13 3.13 Claims Single Employee and Spouse 21 Paid Claims 973,177 228,710 1,201,887 Remove Claims Exceeding Stop Loss of $50K (351,167) - (351,167) IBNR 144,108 3,425 147,533 Incurred Claims 766,118 232,135 998,253 Incurred Claims PMPM 256.31 77.66 333.98 Projected Claims Costs Months of Trend 13.5 13.5 13.5 Annual Trend Rate 8.00% 8.00% 8.00% Compound Applied Trend Factor 1.0904 1.0904 1.0904 Trend Incurred Claims PMPM 279.49 84.69 364.18 Prior Year Member Months 3,955 3,955 3,955 Prior Year Paid Claims 958,686 190,369 1,149,055 Prior Year Incurred Claims PMPM 242.40 48.13 290.53 Prior Year Trended Incurred Claims PMPM 282.73 56.14 338.88 Prior Year Weighting 50% 50% Weighted Trend Incurred Claims PMPM 281.11 70.42 351.53 Member to Employee Ratio 3.07 3.07 Projected Claims 281.11 70.42 351.53 PMPM PEPM 864.16 216.46 1,080.62 Total 93,330 23,378 116,707 13 19/20 Year Agg Stop Specific Specific Loss Number of Stop Loss Estimated Stop Loss Attachment Coverages Employees Premium Claims Cost Premium Point 21 181.59 469.52 107.47 519.65 Single Employee and Spouse 21 388.01 1,003.22 229.63 1,110.32 Employee and Children 10 350.16 905.36 207.23 1,002.01 Family Coverage 56 529.92 1,370.11 313.61 1,516.38 Total 108 45,138.60 116,707.48 26,713.56 129,166.92 PEPM 417.95 1,080.62 247.35 1,195.99 13 Exhibit 9 City of Chubbuck Self-funded Medical Plan Projected Expenses - 10/1/2025 to 9/30/2026 Enrollment Current Employees 108 Current Members 332 Average Number of Members Per Employee 3.07 14 PEPM Annual Administrative Fees (Medical/Rx) Blue Cross of Idaho TPA Fee 53.81 69,738 Telehealth 0.75 972 Nurse Advice Line 0.15 194 Medical Commission 20.00 25,920 Tota 1 74.71 96,824 Pharmacy Rebates (27.78) (36,000) Health Care Reform and Idaho Fees PCORI Fee 0.77 996 Idaho Immunization Assessment 9.75 12,636 Idaho Tax 0.12 159 Total 10.64 13,791 Estimated Other Fees and Operating Expenses Actuarial 12,500 Accounting and Audit 20,000 Fidelity Bond 300 Annual Idaho Filing Fee 675 Other 7,500 40,975 Total 31.62 Tota I 116.97 1 1 151,591 Enrollment Current Employees 108 Current Members 332 Average Number of Members Per Employee 3.07 14 Exhibit 10 City of Chubbuck Self-funded Medical Plan Contribution Certification - 10/1/2025 to 9/30/2026 - Based on Aggregate Stop -loss Attachment Point 15 Employee Employee Employee and Monthly Only and Spouse Children Family Total PEPM Estimated Claims Costs Aggregate stop -loss attachment point PEPM 519.65 1,110.32 1,002.01 1,516.38 129,166.92 1,195.99 Potential Cost of Individual Specific Deductibles - - - - - - Estimated Expenses Specific stop -loss premium PEPM 181.59 388.01 350.16 529.92 45,138.60 417.95 Aggregate stop -loss premium PEPM 21.28 21.28 21.28 21.28 21298.24 21.28 Pharmacy Rebates (27.78) (27.78) (27.78) (27.78) (3,000.00) (27.78) Administrative Fees (Medical/Rx) 74.71 74.71 74.71 74.71 8,068.68 74.71 Health Care Reform and Idaho Fees 10.64 10.64 10.64 10.64 1,149.28 10.64 Management/Professional Fees PEPM 31.62 31.62 31.62 31.62 3,414.58 31.62 Other Amounts to fund additional IBNR margin 22.87 22.87 22.87 22.87 2,469.49 22.87 Estimated Total Costs 834.58 1,631.67 1,485.51 2,179.64 188,705.79 1,747.28 Selected Contribution Rate 176,858.07 1,637.57 797.81 1,531.20 1,396.72 2,035.39 Premium Margin (36.76) (100.47) (88.79) (144.25) (11,847.71) (109.70) As Percent of Contribution Rate -4.6% -6.6% -6.4% -7.1% -6.7% Estimated Employees by Coverage 21 21 10 56 Prior Year Contribution Rate 693.75 1,331.48 1,214.54 1,769.90 153,789.63 1,423.98 Percentage Increase - Selected Premium 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15 Exhibit 11 City of Chubbuck Self-funded Medical Plan Contribution Certification - 10/1/2025 to 9/30/2026 - Based on Projected Claims Costs IN Employee Employee Employee and Monthly Only and Spouse Children Family Total PEPM Estimated Claims Costs Estimated Claims Costs PEPM 469.52 1,003.22 905.36 1,370.11 116,707.48 1,080.62 Potential Cost of Individual Specific Deductibles - - - - - - Estimated Expenses Specific stop -loss premium PEPM 181.59 388.01 350.16 529.92 45,138.60 417.95 Aggregate stop -loss premium PEPM 21.28 21.28 21.28 21.28 2,298.24 21.28 Pharmacy Rebates (27.78) (27.78) (27.78) (27.78) (3,000.00) (27.78) Administrative Fees (Medical/Rx) 74.71 74.71 74.71 74.71 8,068.68 74.71 Health Care Reform and Idaho Fees 10.64 10.64 10.64 10.64 1,149.28 10.64 Management/Professional Fees PEPM 31.62 31.62 31.62 31.62 3,414.58 31.62 Other Amounts to fund additional IBNR margin 22.87 22.87 22.87 22.87 2,469.49 22.87 Estimated Total Costs 784.45 1,524.57 1,388.85 2,033.37 176,246.35 1,631.91 Selected Contribution Rate 176,858.07 1,637.57 797.81 1,531.20 1,396.72 2,035.39 Premium Margin 13.36 6.64 7.87 2.02 611.73 5.66 As Percent of Contribution Rate 1.7% 0.4% 0.6% 0.1% 0.3% Estimated Employees by Coverage 21 21 10 56 IN