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HomeMy WebLinkAboutItem #3 Health TrustROY & ASSOCIATES, INC. Consulting Actuaries 3115 East Lion Lane, Suite 160 Salt Lake City, Utah 84121 (801) 272-4777 FAX (801) 272-4791 August 29, 2024 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 10/1/2024 to 9/30/2025 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 9/30/2025 for the City of Chubbuck Health Plan Trust. This certification includes the new recommended contribution rates to be effective 10/1/2024. 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, 2024. 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 10/1/2023 to 9/30/2024 plan year. It is expected that on a best claims cost estimate basis the surplus of the trust will increase $195,000 to over $1,500,000 by 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 9/30/2025 IBNR Reserve • Exhibit 8 - Projected Claims Costs -10/1/2024 to 9/30/2025 • Exhibit 9 -Projected Expenses -10/1/2024 to 9/30/2025 • Exhibit 10 - Contribution Certification - Based on Aggregate Stop -loss Attachment Point • Exhibit 11- Contribution Certification - Based on Projected Claims Costs We recommend the following monthly plan contribution rates for the 10/1/2024 to 9/30/2025 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. Monthly Prior Contribution Monthly Rate Contribution Effective Percentage Coverage Rate 10/1/2024 Increase Employee Only 630.68 693.75 10.0% Employee and Spouse 1,210.44 1,331.48 10.0% Employee and Children 1,104.13 1,214.54 10.0% Family 1,609.00 1,769.90 10.0% Overall Rate Increase I I 1 10.0% 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 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 6/30/2024 trust financial statements. The IBNR at 6/30/2024 of $ 94,232 is increased to the amount shown in Exhibit 7 over the remaining 15 -month projection period. 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 6/30/2024. Surplus grows from $1,387,197 to $1,565,541 over the projection period. Exhibit 2 shows the reconciliation of surplus over the projection period. It also shows the calculation of the minimum required surplus. Due to the large increase in the aggregate stop loss attachment point, the contribution rates based on the best estimate claims costs are about 5.6% 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 2024/2025 plan year is approximately $100,000 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 $492,687 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 109 and increase to 120 over the projection period. The other expenses are as shown in Exhibit 9. The trust is projected to have income in all months of 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 $1,260,690 compared to the surplus in Exhibit 1 of $1,565,541. 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. No interest is assumed to be earned on cash balances in any of the scenarios. Exhibit 7 shows the development of the 9/30/2025 IBNR reserve and also shows the increase in the reserve margin and claims settlement expense margin from the 6/30/2024 IBNR reserve certification. The claims completion factors are the same as those used in the 6/30/2024 IBNR reserve certification. Exhibit 8 shows the development of the projected 10/1/2024 to 9/30/2025 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 c1 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 10/1/2024 to 9/30/2025 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 10/1/2024 to 9/30/2025 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 9.9% for adverse claim deviation. Should claims reach the aggregate stop loss attachment point (Exhibit 10), they will be deficient by 5.6%. 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 -24 Jul -24 Aug -24 Sep -24 Oct -24 Nov -24 Dec -24 Jan -25 Feb -25 Mar -25 Apr -25 May -25 Jun -25 Jul -25 Aug -25 Sep -25 Balance Sheet Assets Cash on hand and on deposit 1,619,443 1,628,268 1,637,092 1,641,417 1,656,832 1,674,891 1,692,951 1,707,962 1,726,868 1,746,135 1,763,752 1,783,369 1,802,986 1,820,603 1,836,810 1,856,518 Certificates of deposit - - - - - - - - - - - - - - - - Short-term investments - - - - - - - - - - - - - - - - Accounts for any other invested assets, if any - - - - - - - - - - - - - - - - Other invested assets - - - - - - - - - - - - - - - - Subtotal - cash and invested assets 1,619,443 1,628,268 1,637,092 1,641,417 1,656,832 1,674,891 1,692,951 1,707,962 1,726,868 1,746,135 1,763,752 1,783,369 1,802,986 1,820,603 1,836,810 1,856,518 Uncollected contributions - - - - - - - - - - - - - - - - Interest and investment income due and accrued - - - - - - - - - - - - - - - - Stop Loss Receivable from carrier - - - - - - - - - - - - - - - - Prepaid Expenses - - - - - - - - - - - - - - - On deposit with TPA - - - - - - - - - - - - - - Other assets Total Assets 1,619,443 1,628,268 1,637,092 1,641,417 1,656,832 1,674,891 1,692,951 1,707,962 1,726,868 1,746,135 1,763,752 1,783,369 1,802,986 1,820,603 1,836,810 1,856,518 Liabilities Claims unpaid - - - - - - - - - - - - - - - - Incurred but not reported (IBNR) liability 94,232 106,988 120,169 134,962 136,628 138,240 139,906 141,571 143,076 144,742 146,354 148,019 149,631 151,297 152,963 - Unearned contributions - - - - - - - - - - - - - - - Stop Loss Premiums due but unpaid - - - - - - - - - - - - - - - - Claim administration fees/ TPA fees payable - - - - - - - - - - - - - - - - Taxes due or accrued - - - - - - - - - - - - - - - - Other liabilities 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 Total Liabilities 232,246 245,002 258,183 271,364 272,976 274,642 276,254 277,919 279,585 281,090 282,756 284,368 286,033 287,645 289,311 290,977 Surplus Additional Surplus Contribution - - - - - - - - - - - - - - - Unassigned earned/(lost)surplus 1,387,197 1,383,266 1,378,910 1,370,054 1,383,856 1,400,250 1,416,697 1,430,043 1,447,283 1,465,045 1,480,997 1,499,001 1,516,953 1,532,958 1,547,499 1,565,541 Total Surplus 1,387,197 1,383,266 1,378,910 1,370,054 1,383,856 1,400,250 1,416,697 1,430,043 1,447,283 1,465,045 1,480,997 1,499,001 1,516,953 1,532,958 1,547,499 1,565,541 Total Liabilities and Surplus 1,619,443 1,628,268 1,637,092 1,641,417 1,656,832 1,674,891 1,692,951 1,707,962 1,726,868 1,746,135 1,763,752 1,783,369 1,802,986 1,820,603 1,836,810 1,856,518 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 -24 Jul -24 Aug -24 Sep -24 Oct -24 Nov -24 Dec -24 Jan -25 Feb -25 Mar -25 Apr -25 May -25 Jun -25 Jul -25 Aug -25 Sep -25 Reconciliation of Surplus Total surplus, beginning of period 1,079,811 1,387,197 1,383,266 1,378,910 1,370,054 1,383,856 1,400,250 1,416,697 1,430,043 1,447,283 1,465,045 1,480,997 1,499,001 1,516,953 1,532,958 1,547,499 Total Net gain/ (loss) 307,38 (3,931) (4,356) (8,856) 13,803 16,394 16,447 13,346 17,240 17,763 15,951 18,005 17,951 16,005 14,542 18,042 Total surplus, end of period 1,387,197 1,383,266 1,378,910 1,370,054 1,383,856 1,400,250 1,416,697 1,430,043 1,447,283 1,465,045 1,480,997 1,499,001 1,516,953 1,532,958 1,547,499 1,565,541 Adequacy of Surplus Total surplus, end of period 1,387,197 1,383,266 1,378,910 1,370,054 1,383,856 1,400,250 1,416,697 1,430,043 1,447,283 1,465,045 1,480,997 1,499,001 1,516,953 1,532,958 1,547,499 1,565,541 Minimum required surplus 414,250 414,250 414,250 414,250 492,687 492,687 492,687 492,687 492,687 492,687 492,687 492,687 492,687 492,687 492,687 492,687 Excess (deficient) reserves 972,947 969,016 964,660 955,804 891,169 907,562 924,010 937,356 954,595 972,358 988,309 1,006,314 1,024,265 1,040,270 1,054,812 1,072,853 Calculation of Minimum Required Surplus (Plan Yr) Method 1 Average monthly contribution x three Method 2 414,250 492,687 Aggregate dollar stop -loss attachment point 1,170,078 1,480,767 Excess claims over aggregate stop loss attachment point Specific stop loss exposure not applicable to aggregate Estimated total expenses (incl stop loss prem) 446,876 579,733 Estimated contributions 1,656,998 1,970,750 Difference (minimum of $0) - 89,751 110% of difference - 98,726 Method 1 414,250 492,687 Exhibit 3 City of Chubbuck Self-funded Medical Plan Proforma Income Statement - Best Estimate Claims Cost City of Chubbuck Self-funded Medical Plan Jun -24 Jul -24 Aug -24 Sep -24 Oct -24 Nov -24 Dec -24 Jan -25 Feb -25 Mar -25 Apr -25 May -25 Jun -25 Jul -25 Aug -25 Sep -25 Statement of Income Operating Revenue Contributions from Employer 1,225,265 143,911 143,911 143,911 153,548 156,011 156,011 159,806 163,046 166,148 169,132 169,132 169,132 169,132 169,826 169,826 Stop Loss Recovered - - - - - - - - - - - - - - - - Other Revenue 30,834 _ Total Operating Revenue 1,256,099 143,911 143,911 143,911 153,548 156,011 156,011 159,806 163,046 166,148 169,132 169,132 169,132 169,132 169,826 169,826 Operating Expenses Claims Paid 696,388 95,787 95,787 95,787 91,699 93,146 93,146 95,381 97,251 99,117 100,906 100,906 100,906 100,906 101,276 101,276 Stop Loss Recoveries (57,583) - - Change in IBNR (14,569) 12,756 13,181 13,181 1,612 1,666 1,612 1,666 1,666 1,505 1,666 1,612 1,666 1,612 1,666 1,666 Claims Incurred 624,236 108,542 108,968 108,968 93,311 94,811 94,758 97,047 98,917 100,622 102,572 102,518 102,572 102,518 102,941 102,941 Stop Loss coverage expense paid - specific 276,284 30,341 30,341 30,341 32,925 33,444 33,444 34,247 34,918 35,588 36,231 36,231 36,231 36,231 36,363 36,363 Stop Loss coverage expense paid -aggregate 1,799 1,799 1,799 1,963 2,000 2,000 2,055 2,110 2,147 2,184 2,184 2,184 2,184 2,202 2,202 Pharmacy Rebates (36,250) (1,500) (1,500) (1,500) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) Claims administration/TPA fees paid 65,472 5,318 5,318 5,318 5,624 5,729 5,729 5,887 6,044 6,150 6,255 6,255 6,255 6,255 6,307 6,307 Management/Professional Service fees paid 17,346 2,180 2,180 6,680 6,782 4,472 4,472 7,532 4,592 4,632 6,672 4,672 4,672 6,672 8,192 4,692 Taxes paid 1,626 1,076 1,076 1,076 1,057 1,076 1,076 1,606 1,136 1,155 1,175 1,175 1,175 1,175 1,185 1,185 ACA -PCORI Fee 85 85 85 84 85 85 88 90 92 93 93 93 93 94 94 Other operating expenses Total Operating Expenses 948,713 147,842 148,267 152,767 139,745 139,618 139,564 146,460 145,807 148,385 153,181 151,127 151,181 153,127 155,284 151,784 Operating Gain (Loss) 307,386 (3,931) (4,356) (8,856) 13,803 16,394 16,447 13,346 17,240 17,763 15,951 18,005 17,951 16,005 14,542 18,042 Net Income (Loss) 307,386 (3,931) (4,356) (8,856) 13,803 16,394 16,447 13,346 17,240 17,763 15,951 18,005 17,951 16,005 14,542 18,042 Oct -23 to Oct -24 to Sept -24 Sep -25 1,656,998 1,970,750 30,834 1,687,832 1,970,750 983,747 1,175,916 (57,583) - 24,549 19,613 950,714 1,195,529 367,308 422,213 5,396 25,415 (40,750) (24,000) 81,426 72,796 28,386 68,050 4,855 14,177 256 1,083 1,397,589 1,775,262 290,242 195,487 290,242 195,487 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 -24 Jul -24 Aug -24 Sep -24 Oct -24 Nov -24 Dec -24 Jan -25 Feb -25 Mar -25 Apr -25 May -25 Jun -25 Jul -25 Aug -25 Sep -25 Balance Sheet Assets Cash on hand and on deposit 1,619,443 1,628,268 1,637,092 1,641,417 1,633,060 1,626,971 1,620,883 1,611,168 1,604,861 1,598,433 1,589,890 1,583,348 1,576,805 1,568,262 1,558,215 1,551,667 Certificates of deposit - - - - - - - - - - - - - - - - Short-term investments - - - - - - - - - - - - - - - - Accounts for any other invested assets, if any - - - - - - - - - - - - - - - - Other invested assets - - - - - - - - - - - - - - - - Subtotal - cash and invested assets 1,619,443 1,628,268 1,637,092 1,641,417 1,633,060 1,626,971 1,620,883 1,611,168 1,604,861 1,598,433 1,589,890 1,583,348 1,576,805 1,568,262 1,558,215 1,551,667 Uncollected contributions - - - - - - - - - - - - - - - - Interest and investment income due and accrued - - - - - - - - - - - - - - - - Stop Loss Receivable from carrier - - - - - - - - - - - - - - - - Prepaid Expenses - - - - - - - - - - - - - - - On deposit with TPA - - - - - - - - - - - - - - Other assets Total Assets 1,619,443 1,628,268 1,637,092 1,641,417 1,633,060 1,626,971 1,620,883 1,611,168 1,604,861 1,598,433 1,589,890 1,583,348 1,576,805 1,568,262 1,558,215 1,551,667 Liabilities Claims unpaid - - - - - - - - - - - - - - - - Incurred but not reported (IBNR) liability 106,988 120,169 134,962 136,628 138,240 139,906 141,571 143,076 144,742 146,354 148,019 149,631 151,297 152,963 - - Unearned contributions - - - - - - - - - - - - - - Stop Loss Premiums due but unpaid - - - - - - - - - - - - - - - - Claim administration fees/ TPA fees payable - - - - - - - - - - - - - - - - Taxes due or accrued - - - - - - - - - - - - - - - - Other liabilities 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 138,014 Total Liabilities 232,246 245,002 258,183 271,364 272,976 274,642 276,254 277,919 279,585 281,090 282,756 284,368 286,033 287,645 289,311 290,977 Surplus Additional Surplus Contribution - - - - - - - - - - - - - - - Unassigned earned/(lost)surplus 1,387,197 1,383,266 1,378,910 1,370,054 1,360,084 1,352,330 1,344,629 1,333,248 1,325,276 1,317,343 1,307,135 1,298,980 1,290,772 1,280,617 1,268,904 1,260,690 Total Surplus 1,387,197 1,383,266 1,378,910 1,370,054 1,360,084 1,352,330 1,344,629 1,333,248 1,325,276 1,317,343 1,307,135 1,298,980 1,290,772 1,280,617 1,268,904 1,260,690 Total Liabilities and Surplus 1,619,443 1,628,268 1,637,092 1,641,417 1,633,060 1,626,971 1,620,883 1,611,168 1,604,861 1,598,433 1,589,890 1,583,348 1,576,805 1,568,262 1,558,215 1,551,667 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 -24 Jul -24 Aug -24 Sep -24 Oct -24 Nov -24 Dec -24 Jan -25 Feb -25 Mar -25 Apr -25 May -25 Jun -25 Jul -25 Aug -25 Sep -25 Reconciliation of Surplus Total surplus, beginning of period 1,079,811 1,387,197 1,383,266 1,378,910 1,370,054 1,360,084 1,352,330 1,344,629 1,333,248 1,325,276 1,317,343 1,307,135 1,298,980 1,290,772 1,280,617 1,268,904 Total Net gain/ (loss) 307,38 (3,931) (4,356) (8,856) (9,970) (7,754) (7,700) (11,381) (7,972) (7,933) (10,208) (8,155) (8,208) (10,155) (11,714) (8,214) Total surplus, end of period 1,387,197 1,383,266 1,378,910 1,370,054 1,360,084 1,352,330 1,344,629 1,333,248 1,325,276 1,317,343 1,307,135 1,298,980 1,290,772 1,280,617 1,268,904 1,260,690 Adequacy of Surplus Total surplus, end of period 1,387,197 1,383,266 1,378,910 1,370,054 1,360,084 1,352,330 1,344,629 1,333,248 1,325,276 1,317,343 1,307,135 1,298,980 1,290,772 1,280,617 1,268,904 1,260,690 Minimum required surplus 414,250 414,250 414,250 414,250 492,687 492,687 492,687 492,687 492,687 492,687 492,687 492,687 492,687 492,687 492,687 492,687 Excess (deficient) reserves 972,947 969,016 964,660 955,804 867,396 859,642 851,942 840,561 832,588 824,656 814,447 806,293 798,084 787,930 776,216 768,002 Calculation of Minimum Required Surplus (Plan yr) Method 1 Average monthly contribution x three Method 2 414,250 492,687 Aggregate dollar stop -loss attachment point 1,170,078 1,480,767 Excess claims over aggregate stop loss attachment point Specific stop loss exposure not applicable to aggregate Estimated total expenses (incl stop loss prem) 446,876 579,733 Estimated contributions 1,656,998 1,970,750 Difference (minimum of $0) - 89,751 110% of difference - 98,726 Method 1 414,250 10 492,687 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 -24 Jul -24 Aug -24 Sep -24 Oct -24 Nov -24 Dec -24 Jan -25 Feb -25 Mar -25 Apr -25 May -25 Jun -25 Jul -25 Aug -25 Sep -25 Statement of Income Operating Revenue Contributions from Employer 1,225,265 143,911 143,911 143,911 153,548 156,011 156,011 159,806 163,046 166,148 169,132 169,132 169,132 169,132 169,826 169,826 Stop Loss Recovered - - - - - - - - - - - - - - - - Other Revenue 30,834 _ Total Operating Revenue 1,256,099 143,911 143,911 143,911 153,548 156,011 1 156,011 159,806 1 163,046 166,148 169,132 169,132 169,132 169,132 169,826 169,826 Operating Expenses Claims Paid 696,388 95,787 95,787 95,787 115,472 117,293 117,293 120,108 122,463 124,813 127,066 127,066 127,066 127,066 127,531 127,531 Stop Loss Recoveries (57,583) - - Change in IBNR (14,569) 12,756 13,181 13,181 1,612 1,666 1,612 1,666 1,666 1,505 1,666 1,612 1,666 1,612 1,666 1,666 Claims Incurred 624,236 108,542 108,968 108,968 117,084 118,959 118,905 121,774 124,129 126,317 128,732 128,678 128,732 128,678 129,197 129,197 Stop Loss coverage expense paid - specific 276,284 30,341 30,341 30,341 32,925 33,444 33,444 34,247 34,918 35,588 36,231 36,231 36,231 36,231 36,363 36,363 Stop Loss coverage expense paid -aggregate 1,799 1,799 1,799 1,963 2,000 2,000 2,055 2,110 2,147 2,184 2,184 2,184 2,184 2,202 2,202 Pharmacy Rebates (36,250) (1,500) (1,500) (1,500) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) (2,000) Claims administration/TPA fees paid 65,472 5,318 5,318 5,318 5,624 5,729 5,729 5,887 6,044 6,150 6,255 6,255 6,255 6,255 6,307 6,307 Management/Professional Service fees paid 17,346 2,180 2,180 6,680 6,782 4,472 4,472 7,532 4,592 4,632 6,672 4,672 4,672 6,672 8,192 4,692 Taxes paid 1,626 1,076 1,076 1,076 1,057 1,076 1,076 1,606 1,136 1,155 1,175 1,175 1,175 1,175 1,185 1,185 ACA -PCORI Fee 85 85 85 84 85 85 88 90 92 93 93 93 93 94 94 Other operating expenses Total Operating Expenses 948,713 147,842 148,267 152,767 163,518 163,765 163,712 171,187 171,019 174,081 179,340 177,287 177,340 179,287 181,539 178,039 Operating Gain(Loss) 307,38 (3,931) (4,356) (8,856) (9,970) (7,754) (7,700) (11,381) (7,972) (7,933) (10,208) (8,155) (8,208) (10,155) (11,714) Net Income (Loss) 1 307,386 1 (3,931) (4,356) (8,856) (9,970) (7,754) (7,700) (11,381) (7,972) (7,933) (10,208) (8,155) (8,208) (10,155) (11,714) 11 Oct -23 to Oct -24 to Sept -24 Sep -25 1,656,998 1,970,750 30,834 1,687,832 1,970,750 983,747 1,480,767 (57,583) - 24,549 19,613 950,714 1,500,380 367,308 422,213 5,396 25,415 (40,750) (24,000) 81,426 72,796 28,386 68,050 4,855 14,177 256 1,083 1,397,589 2,080,114 290,242 (109,364) 290,242 (109,364) Exhibit 7 City of Chubbuck Self-funded Medical Plan Projection of 9/30/2025 IBNR Reserve Monthly Employees Monthly Members Estimated Incurred Claims PMPM Estimated Incurred Claims Estimated Percentage Paid by 9/30/2025 (1) Estimated Portion Paid by 9/30/2025 Aug -24 Sep -24 Oct -24 Nov -24 Dec -24 Jan -25 Feb -25 Mar -25 Apr -25 May -25 Jun -25 Jul -25 Aug -25 Sep -25 9/30/2025 Total 6/30/2024 IBNR Change 109 341 275.62 93,985 0.999657 93,953 109 341 275.62 93,985 0.999675 93,954 107 335 275.62 92,331 0.999052 92,244 109 341 275.62 93,985 0.996999 93,703 109 341 275.62 93,985 0.992791 93,307 112 350 275.62 96,465 0.993329 95,822 115 360 275.62 99,222 0.986292 97,861 117 366 275.62 100,875 0.983675 99,228 119 372 275.62 102,529 0.974985 99,964 119 372 275.62 102,529 0.970867 99,542 119 372 275.62 102,529 0.944271 96,815 119 372 275.62 102,529 0.925387 94,879 120 375 275.62 103,356 0.829667 85,751 120 375 275.62 103,356 0.313071 32,358 Estimated IBNR as of 9/30/2025 32 31 88 282 678 643 1,360 1,647 2,565 2,987 5,714 7,650 17,605 70,998 112,279 66,564 45,715 Margin @ 25% 8 8 22 71 169 161 340 412 641 747 1,428 1,912 4,401 17,750 28,070 16,641 11,429 Estimated Administration Cost to Discharge the Reserve at 2 Months of Claims 12,614 12,614 11,027 1,587 Required IBNR Reserve at 9/30/2025 40 38 109 353 847 804 1,700 2,058 3,206 3,734 7,142 9,562 22,006 101,362 152,963 94,232 58,731 (1) Based on June 30, 2024 medical claims monthly completion factors from IBNR calculation. 12 Exhibit 8 City of Chubbuck Self-funded Medical Plan Projected Claims Costs - 10/1/2024 to 9/30/2025 Plan: City of Chubbuck Renewal Period: 10/1/2024 to 9/30/2025 Experience Period: 10/1/2023 to 6/30/2024 13 Medical Rx Medical/Rx Enrollment Agg Stop Current Employees 109 109 109 Current Members 341 341 341 Experience Period Employee Months 939 939 939 Experience Period Member Months 2,949 2,949 2,949 Experience Period Average Members per Employee 3.14 3.14 3.14 Claims Single Employee and Spouse 23 Paid Claims 409,141 136,143 545,284 Remove Claims Exceeding Stop Loss of $50K (57,582) - (57,582) IBNR 55,524 11,040 66,564 Incurred Claims 407,083 147,183 554,266 Incurred Claims PMPM 138.04 49.91 187.95 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 150.53 54.42 204.95 Prior Year Member Months 3,899 3,899 3,899 Prior Year Paid Claims 614,106 307,211 921,317 Prior Year Incurred Claims PMPM 157.50 78.79 236.30 Prior Year Trended Incurred Claims PMPM 183.71 91.90 275.62 Prior Year Weighting 100% 100% Weighted Trend Incurred Claims PMPM 183.71 91.90 275.62 Member to Employee Ratio 3.13 3.13 Projected Claims 183.71 91.90 275.62 PMPM PEPM 574.73 287.51 862.25 Total 62,646 31,339 93,985 13 19/20 Year Agg Stop Specific Specific Loss Number of Stop Loss Estimated Stop Loss Attachment Coverages Employees Premium Claims Cost Premium Point 16 132.56 369.20 107.47 464.91 Single Employee and Spouse 23 283.24 788.86 229.63 993.37 Employee and Children 15 255.61 711.91 207.23 896.47 Family Coverage 55 386.83 1,077.37 313.61 1,356.67 Total 109 33,745.31 93,984.86 27,358.01 118,350.02 PEPM 309.59 862.25 250.99 1,085.78 13 Exhibit 9 City of Chubbuck Self-funded Medical Plan Projected Expenses - 10/1/2024 to 9/30/2025 Enrollment Current Employees 109 Current Members 341 Average Number of Members Per Employee 3.13 14 PEPM Annual Administrative Fees (Medical/Rx) Blue Cross of Idaho TPA Fee 50.76 66,394 Telehealth 0.75 981 Nurse Advice Line 0.15 196 Medical Commission 20.00 26,160 71.66 93,731 Total Pharmacy Rebates (18.35) (24,000) Health Care Reform and Idaho Fees PCORI Fee 0.78 1,023 Idaho Immunization Assessment 9.75 12,753 Idaho Tax 0.13 164 Tota 1 10.66 13,940 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 31.33 Total 113.64 1 148,646 Enrollment Current Employees 109 Current Members 341 Average Number of Members Per Employee 3.13 14 Exhibit 10 City of Chubbuck Self-funded Medical Plan Contribution Certification - 10/1/2024 to 9/30/2025 - 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 464.91 993.37 896.47 1,356.67 118,350.02 1,085.78 Potential Cost of Individual Specific Deductibles - - - - - - Estimated Expenses Specific stop -loss premium PEPM 132.56 283.24 255.61 386.83 33,745.31 309.59 Aggregate stop -loss premium PEPM 18.35 18.35 18.35 18.35 2,000.15 18.35 Pharmacy Rebates (18.35) (18.35) (18.35) (18.35) (2,000.00) (18.35) Administrative Fees (Medical/Rx) 71.66 71.66 71.66 71.66 7,810.94 71.66 Health Care Reform and Idaho Fees 10.66 10.66 10.66 10.66 1,161.64 10.66 Management/Professional Fees PEPM 31.33 31.33 31.33 31.33 3,414.58 31.33 Other Amounts to fund additional IBNR margin 14.99 14.99 14.99 14.99 1,634.41 14.99 Estimated Total Costs 726.11 1,405.25 1,280.72 1,872.14 166,117.06 1,524.01 Selected Contribution Rate 157,286.75 1,443.00 693.75 1,331.48 1,214.54 1,769.90 Premium Margin (32.37) (73.77) (66.18) (102.24) (8,830.31) (81.01) As Percent of Contribution Rate -4.7% -5.5% -5.4% -5.8% -5.6% Estimated Employees by Coverage 16 23 15 55 Prior Year Contribution Rate 630.68 1,210.44 1,104.13 1,609.00 142,987.95 1,311.82 Percentage Increase - Selected Premium 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 15 Exhibit 11 City of Chubbuck Self-funded Medical Plan Contribution Certification - 10/1/2024 to 9/30/2025 - 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 369.20 788.86 711.91 1,077.37 93,984.86 862.25 Potential Cost of Individual Specific Deductibles - - - - - - Estimated Expenses Specific stop -loss premium PEPM 132.56 283.24 255.61 386.83 33,745.31 309.59 Aggregate stop -loss premium PEPM 18.35 18.35 18.35 18.35 2,000.15 18.35 Pharmacy Rebates (18.35) (18.35) (18.35) (18.35) (2,000.00) (18.35) Administrative Fees (Medical/Rx) 71.66 71.66 71.66 71.66 7,810.94 71.66 Health Care Reform and Idaho Fees 10.66 10.66 10.66 10.66 1,161.64 10.66 Management/Professional Fees PEPM 31.33 31.33 31.33 31.33 3,414.58 31.33 Other Amounts to fund additional IBNR margin 14.99 14.99 14.99 14.99 1,634.41 14.99 Estimated Total Costs 630.40 1,200.75 1,096.16 1,592.83 141,751.90 1,300.48 Selected Contribution Rate 157,286.75 1,443.00 693.75 1,331.48 1,214.54 1,769.90 Premium Margin 63.35 130.74 118.38 177.07 15,534.84 142.52 As Percent of Contribution Rate 9.1% 9.8% 9.7% 10.0% 9.9% Estimated Employees by Coverage 16 23 15 55 IN