HomeMy WebLinkAboutItem #4 Health Plan Trustlao�t�\
CHUBBUCK
1 0 A H 0
April 25, 2023
Council,
Office of the Treasurer
290 East Linden Avenue, Chubbuck, ID 83202
208.237.2400 — Fax 208.237.2371
www.CityofChubbuck.us
When the City of Chubbuck left the IIIA and started self -funding employee benefits there was a
realization that there could be, for a time, some savings from the change, Knowing that employee
benefits were important and that the costs would increase, the council then requested that each fund
and department continue to budget their employee benefits at the current rate rather than adjust to
the upcoming expected rate to build reserves for the employee benefit plan. These additional resources
were accounted for in the employee benefit fund.
Initially, after leaving the IIIA, the employee benefit fund was set up to account for the employee benefit
plan. However, several years afterthe city started self -funding its employee benefits, the State of
Idaho's Department of Insurance required the city to establish a health plan trust. This trust was
created, and a large portion of the resources in the employee benefit fund were transferred to the
health plan trust. Today, the trust administers the benefit plan for city employees, budgets and actual
expenses for employee benefits are matched, and for accounting purposes, there is no longer a need for
the employee benefit fund.
The balance of the employee benefit fund is currently $347,079.04.
If the resources in the employee benefit fund are going to be used for employee benefits, they should
be transferred to the health plan trust. As part of the trust, these funds would help cover the
fluctuations that occur in the trust fund balance and cover unexpected costs as was initially planned.
The trustees would recommend that the city consider transferring the full amount to the health plan
trust. However, at a minimum it is requested the city transfer 100K. There is a projected need for 100K
to maintain the FY24 surplus at the level established by the health plan trust's trustees.
When closing the employee benefit fund, any resources that are not transferred to the health plan trust
will be returned to each of the City's 5 operating funds and added to their fund balance. The percentage
of distribution would be: General 53%, HSR 7%, Water 18%, Wastewater 8%, and Sanitation 14%.