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Indian River County, Florida
<br />Notes To Financial Statements
<br />Year Ended September 30, 2019
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<br />106
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<br />NOTE 18 - RISK MANAGEMENT - Continued
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<br />General Liability, Property, Worker’s Compensation and Medical - Continued
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<br />The County purchases excess insurance to cover claims in excess of the amounts listed above. There is
<br />a 5% deductible per location for property damages arising due to a hurricane under the reinsurance
<br />policy.
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<br />The County is also self insured for medical claims covering employees and their eligible dependents.
<br />As required by Section 112.081, Florida Statutes, retirees and their eligible dependents are provided the
<br />same health care coverage as is offered to active employees; however, the retirees are responsible for
<br />payment of the premiums. Medical claims are paid from premiums contributed by employees, retirees
<br />and by the County. Premiums and contributions are determined by projected claims based on historical
<br />and actuarial experience. The self insurance plan assumes all risk for claims, other than worker’s
<br />compensation, up to $300,000 per occurrence. The County has purchased a reinsurance policy to cover
<br />claims in excess of these limits. There were eight medical claim reimbursements totaling $670,688 in
<br />excess of the $300,000 limit for fiscal year 2019. In fiscal year 2018 there were eleven medical claim
<br />reimbursements totaling $471,549 and in fiscal year 2017 there were three totaling $61,593.
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<br />The claims liability of $8,254,000 reported at September 30, 2019, is based on the requirements of
<br />generally accepted governmental accounting standards, which require that a liability for claims be
<br />reported if information prior to the issuance of the financial statements indicates that it is probable that
<br />a liability has been incurred at the date of the financial statements, and the amount of the loss can be
<br />reasonably estimated. Estimates for claims incurred but not reported are actuarially determined and
<br />recorded. Based on the actuary’s report, $2,600,000 will be liquidated over the next twelve months.
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<br />Changes in the fund’s claim liability amount during the current and prior three fiscal years are as
<br />follows:
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<br /> Balance at Claims Balance
<br /> Fiscal Year and Changes Claims at Fiscal
<br /> Beginning in Estimates Payments Year End
<br />2015-2016 $ 8,177,520 $ 17,953,550 $ (17,618,550) $ 8,512,520
<br />2016-2017 8,512,520 16,364,331 (16,621,851) 8,255,000
<br />2017-2018 8,255,000 21,400,694 (21,216,694) 8,439,000
<br />2018-2019 8,439,000 25,995,950 (26,180,950) 8,254,000
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<br />Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially
<br />determined and at September 30, 2019, unrestricted net position of $19,927,761 has been designated for
<br />this purpose. The County has elected to accrue the larger of the discounted liability or undiscounted
<br />liability. At September 30, 2019, the undiscounted liability was the greater of the two amounts. The
<br />discount rate used in the calculation was 2%.
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