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July / August 2010
Volume 22, Number 4

News you can use

TAC Health Pool Hands out $5.5 Mil to Members in Renewal Credits
TAC investments made the credit possible

The TAC Health and Employee Benefits Pool (TAC HEBP) Board voted in a recent meeting to extend $5.5 million in renewal credits to member counties.

While the Pool did not make money this year, it did gain money from investments.

“The Pool broke even this year. With an unusual number of high claims during 2009, it was not a great year for us,” said Bill Norwood, TAC Employee Benefits Program manager. “But our reserves were still making us money. We are not here to make money, so we thought that was a great way to give back.”

In 2007, the TAC HEBP Board agreed to issue credits totaling $6 million to counties that renewed their medical coverage. In June 2008, the Board increased the credits to $9 million. In 2009, the Board agreed to keep the renewal credits at $9 million. This year’s $5.5 million renewal credit brings the total renewal credits for the past four years to $29.5 million.

In addition, the Board bucked the national trend in health insurance costs by establishing rates that are up only 8.1 percent on average, significantly lower than the 9.5-10 percent average the rest of the country is experiencing.

The Board adopted specific measures to use in administering the amounts of renewal credits to each county:

• Three years of Pool experiences will be reviewed (calendar year 2007-2009) in awarding the credits;
  
  
• Twenty-five percent of the credit is awarded based on Pool longevity back to 2001; and
  
  
• Seventy-five percent of the renewal credit is based on the Pool member’s loss experience during 2007-2009. Only counties with a surplus are eligible for this portion of the credit.

“Our renewal credits are allocated on a mathematical formula based on a long-term historical view of a county’s longevity and contributions to surplus,” Norwood said. “It’s not subjective. We don’t pick favorites.”

The Board opted to issue monthly credits rather than reduce overall rates because of the need for rates to reflect anticipated claims for the year.

The credits will be issued on each monthly invoice beginning with the group’s anniversary date. Groups must have been a member for at least one full year to qualify.