City of Arlington Health Plan Benefit

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Slide 1

City of Arlington Health Plan Benefit July 2, 2004

Slide 2

Overview Introduction GASB Impacts Health Plan Benefit Alternatives

Slide 3

Health Benefit Change Drivers Escalating medicinal services costs City's momentum arrange outline Workforce demographics Accounting and financing for post business benefits

Slide 4

Recommendations City contracted the Hay Group to survey the flow medical advantage and to consider: How do our ebb and flow benefits look at? Where is the market going later on? Feed introduced proposals to accomplish three objectives: Maintain Market Competitiveness Reduce Upcoming GASB Liability Moderate the Projected Increases in Health Benefit Costs to Address the Continuing Structural Deficit

Slide 5

Recommendations Impacts shift in view of class of representative Almost 1,000 dynamic workers will see a net boost in salary as their premiums drop Remaining dynamic workers and retirees will see an expansion in their premiums

Slide 6

Difficult Balance Employee Impact Benefit Competitiveness Fiduciary Responsibility

Slide 7

GASB

Slide 8

Governmental Accounting Standards Board - GASB Under Financial Accounting Foundation which controls GASB and FASB Set guidelines for budgetary reporting for state and neighborhood governments Recognized as definitive by American Institute of Certified Public Accountants (AICPA) State law requires that the City have a yearly review and issue money related explanations External inspectors take after GASB

Slide 9

Failure to Adhere to GASB Auditors issue a qualified or antagonistic conclusion (versus unfit) Bond guarantors are managed by SEC and require exact budgetary data City is liable to SEC against extortion arrangements City must unveil all material monetary data

Slide 10

Failure to Fund Retiree Health Benefit Lack of subsidizing must be uncovered to money related markets and rating organizations Lowered city security rating Higher getting cost As unfunded commitments develop – address as to "going concern" Unable to issue securities

Slide 11

Health Benefit Alternatives

Slide 12

Consideration of Alternatives Total Annual FY FY GASB GASB '05% '05$ Current $196M 20M 10% $1.3M All options increment GASB obligation and FY 05 cost $121M 11M 3% $300k Proposed

Slide 13

Savings Estimates Annual reserve funds gauges exhibited in the June 15 presentation are ascertained: In Calendar Year terms Across all assets Representing "most ideal situation" Annual investment funds gauges spoke to in today's talk are figured: In Fiscal '05 terms On General Fund affect just Representing a moderate projection of result

Slide 14

Savings Estimates Critical Contributing Factors Migration examination (development from or off particular arrangements) Further assessment of current year guarantee action Final Council choice on proposals

Slide 15

Plan Design Changes Compared to the Hay suggestions, keeping up the present advantage has the accompanying effect: * A clear space shows nonpartisan or no effect.

Slide 16

Prescription Drug Changes Compared to the Hay suggestions, keeping up the present advantage as well as embracing choices has the accompanying effect: * A clear space shows nonpartisan or no effect.

Slide 17

Rate Structure Changes Compared to the Hay proposals, keeping up the present advantage or potentially embracing options has the accompanying effect: * A clear space shows nonpartisan or no effect.

Slide 18

Eligibility For Retiree Benefit Subsidy Compared to the Hay suggestions, keeping up the present advantage as well as embracing choices has the accompanying effect: * A clear space demonstrates impartial or no effect.

Slide 19

Contribution Philosophy - Employee Compared to the Hay suggestions, keeping up the present advantage as well as receiving choices has the accompanying effect: * A clear space shows unbiased or no effect.

Slide 20

Contribution Philosophy - Retiree Compared to the Hay suggestions, keeping up the present advantage or potentially receiving choices has the accompanying effect: * A clear space demonstrates unbiased or no effect.

Slide 21

Contribution Philosophy – Retiree Dependents Compared to the Hay suggestions, keeping up the present advantage or potentially embracing options has the accompanying effect: * A clear space shows nonpartisan or no effect.

Slide 22

Discussion

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