Enfield Residents Seek Answers To Insurance Fund Issues

April 14--ENFIELD -- A small group of residents Wednesday night asked councilors at a community conversation on the budget to explain what happened to the town employee health insurance fund.

Earlier this year, officials learned the town's employee health insurance fund had been significantly underfunded over the last three years and that the account would be nearly depleted by the end of this fiscal year on June 30.

To combat the underfunding, Town Manager Lee Erdmann said preliminary numbers indicate a possible 22 percent increase to cover projected costs next year and to start to replenish that fund. Another possible solution is switching insurance programs, from a self-insured program to a fully-insured program. Town and school officials will meet next week to discuss and possibly decide whether to stay self-insured or sign on with a fully-insured program.

Resident Tom Walsh, one of about 10 who attended Wednesday night's community conversation, said he didn't think the town should "be in the insurance business" and that the budget shouldn't be balanced "on the backs of property owners." He said the nearly 2 mill proposed increase would make it hard to live in town.

Resident Wendy Osada asked for the history of the insurance fund.

Erdmann has said the fund started in the 2008-09 town budget and was well-funded, with an excess of $6 million in the insurance fund by the 2012-13 fiscal year. Then from 2013-14 through this year, the town experienced three years of claims that exceeded funding going into that account. The town continued dipping into that $6 million excess. Preliminary reports indicate that fund will have approximately $117,000 by the end of June, but more accurate numbers will come in at the end of May.

Osada also asked what happened during the three year dip and if the town received bad advice from a health insurance consultant.

Erdmann said it was a mix of "poor communication" and "poor judgment."

Erdmann said the town had originally worked with a health insurance consultant Milliman, then worked with USI Consulting Group. The town is now working with a Milliman consultant, but earlier this week met with representatives from USI to understand what happened during that three year dip.

According to Erdmann, USI became the town's insurance consultant in Aug. 2013, after the 2013-14 rates were established, and worked with the town until last year, when Erdmann brought Milliman back.

He said USI told town officials at Tuesday's meeting that they recommended former town manager Matthew Coppler set higher rates than he ultimately did for employees and the town and board of education's contributions to the program.

Another resident asked what the town was doing to make sure this wouldn't happen again, and that another issue in the budget won't rise in the next few years.

Mayor Scott Kaupin said town and school officials are looking to establish an insurance subcommittee. After the meeting he said the subcommittee would include: two town councilors -- one Republican and one Democrat, two board of education members -- one Republican and one Democrat, as well as town and school officials to oversee the insurance fund. He said the leadership committee is crafting a charge for the committee. Kaupin said the committee will likely be appointed during a May town council meeting.

Erdmann in March proposed a $131 million budget, a $6.6 million or 5.3 percent increase over the current $125 million budget. The proposed budget would increase the tax rate for personal property from 29.89 mills to 31.88 mills -- a 1.99 mill, or 6.7 percent, increase. The proposed budget would reduce the motor vehicle tax rate from 29.89 mills to 28.80 mills -- a 1.09 mill, or 3.65 percent, decrease.

Town councilors began budget deliberations Thursday night. Next Wednesday, the town council and board of education will host a public hearing on the budget at John F. Kennedy Middle School, 155 Raffia Road, at 7 p.m. The proposed budget is available on the town's website, www.enfield-ct.gov, and the school district's proposed budget is available on the school website, www.enfieldschools.org.

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