City of Nashua
Administrative Services Division Phone (603) 589-3260
229 Main Street - Nashua, NH 03060
June 9, 2020
To: Mayor Jim Donchess
Members of the Board of Aldermen
From: Kim Kleiner, Director of Administrative Services
Re: Health Insurance Fund
The following information on the benefits self-insurance fund is provided in response to a request
from the Budget committee on June 2, 2020.
Workplace Benefit Solutions (WBS) estimates the self-insurance benefit fund balance to be $8,934,229
at fiscal year-end.
Balance as of 6/6/20 (Exhibit 1) § 14,034,229
Estimated Addtl Claims ($2,100,000)
Annual Budget True-up for participant shifts ($2,000,000)
Loss Ratio (due to employees for realized savings) ($1,000,000)
S 8,934,229
We recommend, in consultation with WBS, to maintain a fund balance of $8,934,229. The estimated
year-end balance of $8,934,229 reduced by the FY20 costs of 2.5M, to be realized in FY21, would leave
the fund at $6,434,229, Three factors to consider when projecting health care costs for FY21 include:
1. F¥24 Claims will be higher due to rescheduled and delayed procedures due to the COVID19
pandemic. Projections show costs for FY20 will be realized in FY21 (see exhibit 2).
2. Cost of medical care continues to increase. Industry trend projects a 9% increase each year.
3. Only one of the city’s 18 employee groups, the unaffiliated employees, has accepted health care
plan redesign to date.
We believe the FY21 benefits budget of 36.5M can be reduced by $348,334. The city expects a savings
of $348,334 which represents the employer savings due to the shift of participation in the high
deductible health plan of $297,334 and a reduction of $51,000 in administrative fees.
The open enrollment process for FY21, July 1, 2020 - June 30, 2021, resulted in the following shift in
plan participation:
FY20 FY21 Change
HMO (Traditional Plan) 1,371 1,281 (90}
HMO (Plan redesign — Unaffiliated) 59 28 (31)
