Page 80 - 65859_Cover-V3 (2).pdf

HUDSON CITY SCHOOL DISTRICT
SUMMIT COUNTY, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2015

NOTE 11 - RISK MANAGEMENT - (Continued)

The District pays into the self-insurance internal service fund for full-time medical and prescription
drug family coverage $1,271.98 per month for certified, classified and administrative employees.
Single coverage full-time costs are $580.14 for certified, classified and administrative employees.
Employees are considered part-time if they work 17.5 or more hours per week for certified staff or 25
or more hours per week for classified staff and administrators and less than 35 hours per week. Part-
time employees are eligible for family and single coverage. The premiums for part-time employees are
prorated according to hours worked per week for certified employees and classified employees.

The District provides prescription drug insurance to its employees through a self-insured program.
The District pays the cost of prescription drugs above the employee co-payment for a 34 day supply.
The employee co-payment for a 34 day supply is: generic $15, preferred $20 and non-preferred $25.
The District pays the cost of mail order prescriptions above the employee co-payment for a 90 day
supply. The employee co-payment for a 90 day mail order supply is: generic $25, preferred $35 and
non-preferred $45. The third party administrator, Medical Mutual of Ohio, reviews and processes the
claims. The premium for this coverage is included in the medical plan premium amounts stated above.

Dental coverage is provided on a fully-insured basis through Delta Dental of Ohio. There are two
dental plans; Low plan and High plan. For this coverage, the District pays $56.10 and $106.76 per
month under the Low and High plans, respectively, for family coverage and $18.36 and $38.40 per
month under the Low and High plans, respectively, for single coverage for certified employees.
Premiums for classified employees are prorated according to hours worked per 35-hour week with
premiums ranging from $17.42 to $70.60 for family coverage and $7.50 to $21.17 for single coverage.
Employees working 17.5 or more hours per week for certified staff or 25 hours per week for classified
and administrative staff are eligible for dental coverage. The District is responsible for payment of all
claim amounts in excess of the employee payment percentages of fixed rates established in each plan.

The premiums are paid by the funds that pay the salary for the employees, except for those grant funds
whose agreements do not fund employee health insurance, and is based on historical cost information.

The claims liability of $509,862 reported in the internal service fund at June 30, 2015, is based on an
estimate provided by the third party administrators and the requirements of GASB Statement No. 10,
“Accounting and Financial Reporting for Risk Financing and Related Insurance Issues”, as amended
by GASB Statement No. 30, “Risk Financing Omnibus”, which requires that a liability for unpaid
claims costs, including estimates of costs relating to incurred but not reported claims, be accrued at the
estimated ultimate cost of settling the claims. The estimate was not affected by incremental claim
adjustment expenses and does not include other allocated or unallocated claim adjustment expenses.

Changes in claims activity for the past two fiscal years are as follows:

Fiscal Beginning Current Claims Ending
Year Balance Year Claims Payments Balance

2015 $ 530,448 $ 7,292,162 $ (7,312,748) $ 509,862
2014 618,288 6,924,832 (7,012,672) 530,448

Post-employment health care is provided to plan participants or their beneficiaries through the
respective retirement systems discussed in Note 13.

F 60