INTERNAL SERVICE FUNDS

FUND: Medical Benefits Fund

EXPLANATION OF SIGNIFICANT BUDGET VARIANCE 2023 Adopted Budget vs. 2022 Projected Actual

• Premium revenue has increased to continue to build the cash balance to a more sustainable level. The Town is self-insured which makes it important for the Fund to be in a position to absorb high value and/or high volume claims. Overall healthcare costs are also increasing.

• Although healthcare claims are projected lower than the budget in 2022, the 2023 budget is based on an increase of the 2022 budgeted amount to allow for the potential for a higher number of claims in 2023.

• The Fund Balance decresaes $159,700 (10.7%) to bring the cash balance in line with actuarial guidelines.