MORGANTOWN, W.Va. — City Councilors will consider a transfer of funds from the Financial Stabilization Fund to the Life and Health Fund in order to maintain healthcare benefits for city staff.
The city uses a self-funded insurance plan for benefit eligible employees. The plan allows the city to tailor benefits to meet the specific needs of its staff and can result in cost savings because the city only pays for actual healthcare claims incurred, rather than paying premiums to an insurer. These plans do however experience cyclical fluctuations in healthcare costs due to claim variability, utilization trends, stop-loss insurance, and other factors.
According to City Finance Director Jonathan Furgison, the city is currently using the general fund to offset rising healthcare costs.
“To cover the peak in healthcare costs this past year, we temporarily borrowed $1.45 million from the general fund,” Furgison said. “To repay the borrowed funds and replenish the Life and Health Fund reserves, we plan to seek Council approval to transfer $3,315,040 from the Financial Stabilization Fund to the general fund to maintain benefit services.”
Looking ahead, Furgison is optimistic that using historical and predictive analytics will facilitate better forecasting to detect impending fluctuations during high-cost periods.