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St. Joseph County insurance fund $5.8 million short

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St. Joseph County leaders are trying to clean up a mess. They say they didn't budget enough to cover employee health insurance over the past few years.

That means the county insurance fund is $5.8 million short.

The county is self-insured. Employees and the county pay into a fund. When employees get sick, claims are paid out of that fund.

County leaders say the county wasn't paying enough to cover those claims.

"It was kind of a lack of communication, in terms of who's ultimately responsible for watching the claims and what not. People made some assumptions that they shouldn't have made and I think it's pretty obvious to me now that my office is going to have to be watching these claims very thoroughly and making sure that we provide the requisite information to the council so we can budget accordingly,” said St. Joseph County Auditor, Mike Hamann.

A few years ago, the county was actually facing the opposite problem.

"We had a surplus of over $10-million in the fund because we were budgeting the right amount. I think what happened was they realized they could probably budget a little less than they were, which is what they did. But they just never made the correction once some of that surplus had gone down,” said County Commissioner President, Andy Kostielney.

Kostielney says the commission focuses mainly on controlling costs, not budgeting.

"That's primarily an auditor's office decision of, here are the funds, they know exactly how much money is being spent out of them, that's where it should have been caught quite frankly,” he said.

Hamann doesn't want to point fingers. He says he just wants to get this problem resolved.

"What I’ve got in place is a five-year plan, four years maybe if we're lucky, where if we contribute $1 million every year for the next four or five years will be out of that hole, will be ok and we can start building up reserves again,” he said.

With Circuit Breaker laws placing a cap on property taxes, Hamann says the money will have to come from elsewhere. He's looking at County Economic Development Income Tax Funds.

"It's an income tax. We are able to really accurately judge and forecast how much were able to bring in,” Hamann said.

He says it will be equally important to make sure there's good communication throughout the county.

"It's a matter of are we all on the same page in terms of who does what,” he said.

Hamann says the county will also hire a consulting firm to do a claims audit. That will cost the county about $30,000.

Hamann says the investment will pay for itself three or four times over. The auditor says the firm will find clerical errors that will translate to a lot of savings.

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