FY25 Proposed Budget

HEALTH INSURANCE RESERVE

The City maintains insurance reserves for permanent employees’ health care coverage. The health insurance plan is partially self-insured, with a stop-loss policy which provides coverage for claims in excess of $125,000 per employee. Operating funds and participating employees are charged premiums which are deposited into the Health Insurance Reserve Fund. The City reimburses a health insurance provider for actual medical costs incurred plus a claims processing/ administrative fee. The State of Iowa requires all public entities which maintain a self-funded health insurance plan file an annual certificate of compliance with the Iowa Insurance Commissioner, along with an independent actuarial opinion and financial statement which demonstrate that the plan continues to meet the requirements of Iowa Code 509A.14-.15 as well as applicable provisions of the Iowa administrative code. In fiscal year 2023, health insurance premiums increased by 7.16%, and in fiscal year 2024, premiums increased by 8.16%. Premiums are budgeted to increase by 10.00% in fiscal year 2025.

Increases in employee contributions have been negotiated as shown in the following table:

Health Insurance Plan:

FY2022 FY2023 FY2024 FY2025 FY2026

Single Deductible Family Deductible

$

750

$

800

$

800

$

800

$

800

1,200 1,250 2,250

1,600 1,300 2,600

1,600 1,300 2,600

1,600 1,300 2,600

1,600 1,300 2,600

Single Out-of-Pocket Max Family Out-of-Pocket Max Single Contribution/Month (1) Family Contribution/Month (1)

10% of cost 11% of cost 11% of cost 12% of cost 12% of cost 10% of cost 11% of cost 11% of cost 12% of cost 12% of cost

(1) Police premiums will be 10% of cost for Single & Family Contributions/Month in FY2021 and FY2022; premiums will be 11% of cost in FY2023 and FY2024; 12% of cost in FY2025. Fire premiums will be 10% of cost for Single & Family Contributions/Month starting in FY2022; premiums will be 11% of cost in FY2023 and FY2024. AFSCME & Non-union premiums will be 10% of cost starting in FY2022 and will be updated premiums will be 11% of cost in FY2023 and FY2024; 12% of cost in FY2025.

The fiscal year 2024 estimated ending fund balance is estimated at $17,515,941. This is an increase of $1,115,529 or 6.8% from the fiscal year 2023 ending fund balance of $16,400,412. For fiscal year 2025, the fund balance is expected to increase to $19,611,041 which is an increase of $2,095,100 or 12.0%. Restricted/assigned fund balance represents the City’s Net OPEB Obligation. The City’s Net OPEB obligation at June 30, 2023 was $8,730,093. This increased by $606,478 or 7.5% over the fiscal year 2022 restricted/assigned fund balance due to increases in actual experience, assumptions, interest, and service cost estimates.

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