Subject:
Title
Board Budget Amendment No. 1 realigning Fiscal Year 2025 Budget contingency reserves for expenditure within the Employee Health Benefits Fund.
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Recommended Action:
Recommended Action
Approval of Board Budget Amendment No. 1 to realign $3,000,000.00 from contingency reserves to medical claims and plan administration expenditure accounts within the Fiscal Year (FY) 2025 Employee Health Benefits Fund Budget.
• Realign $2,500,000.00 from contingency reserves to personnel services for unanticipated catastrophic medical claims and pharmaceutical expenses.
• Realign $500,000.00 from contingency reserves to operating expenses for unanticipated costs associated with transitioning the health plan administration contract from Cigna to United Medical Resources.
• Contingency reserves are appropriated annually to be available for unanticipated spikes in claims activity.
• The revised projection is $3.0M greater than the FY25 estimate in the FY26 Proposed Budget. The FY25 Budget has sufficient reserves for this amendment.
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Strategic Priorities:
Deliver First Class Services to the Public and Our Customers
5.2 Be responsible stewards of the public’s resources
5.3 Ensure effective and efficient delivery of county services and support
Summary:
Summary
This budget amendment is necessary for invoices to be paid for medical and pharmacy services provided to members of Pinellas County’s health benefits plan through the end of the current fiscal year. Recently, claims activity has increased due to some catastrophic illnesses. Updated projections identify a need to increase the expenditure budget for medical services. Contingency reserves are appropriated annually for such unanticipated increases in claims activity. Additionally, costs associated with transitioning to a new health plan administrator were not anticipated when the budget was developed in early 2024.
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Background Information:
There is no prior action associated with this amendment. The Employee Health Benefits fund has higher costs or lower costs from one fiscal year to another. The annual appropriation of contingency reserves provides for the unpredictable variability in medical claims expense.
Fiscal Impact:
Funds are available in FY25 Budget for the Employee Health Benefits Fund. Realigning $3,000,000 from reserves to personnel services and operating expenses is not consistent with the FY25 Estimate in the FY26 Proposed Budget. This amendment will reduce the FY26 Beginning Fund Balance by $3.0M.
Staff Member Responsible:
Chris Rose, Director, Office of Management and Budget
Veronica Ettel, Senior Budget and Financial Management Analyst, Office of Management and Budget
Partners:
Human Resources Department
Attachments:
B-25-01