WATERLOO — The city is on pace to overspend its budget for employee health insurance claims this year.
Waterloo City Council members are scheduled to hold a public hearing Monday on a budget amendment to account for higher-than-expected health and liability insurance costs for the fiscal year ending June 30.
“Since January we have just had a tough year with health insurance,” said Chief Financial Officer Michelle Weidner. “This year it’s very high. The highest it’s been in quite awhile, if not ever.”
Iowa law does not allow cities to overspend budget areas unless they first hold a hearing to approve an amendment.
The city originally budgeted to spend about $8.7 million this fiscal year on its self-funded health insurance program. The proposed amendment would add $2.76 million more to the budget.
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Weidner said $1.1 million of the overage will come from reimbursements from stop loss insurance the city purchases through private insurers to cover extremely large claims. The remaining $1.67 million is coming from health insurance reserves.
“We’ve just had more claims than we put in the original budget,” she said. “We do have restricted fund balance that can only be used for this.”
The budget amendment also includes $250,000 more to cover liability insurance claims expected to exceed the current budget. The city also has restricted reserves designed to buffer against years with excess liability insurance costs.
The meeting is scheduled for 5:30 p.m. Monday in the City Hall council chambers.