Health Insurance Carriers Refund Surpluses


Michael Wilkinson, LACERS/Legal Representative

By Michael R. Wilkinson, LACERS Commissioner

LACERS has received the return of surpluses of more than $4 million from Anthem Blue Cross, and an amount already with LACERS from Delta Dental that may be used by the plan to reduce any expenses in the future, such as increases in premiums that would otherwise be passed on to our members. The refund was for the 2021 calendar year.

LACERS will receive more than $2.2 million in surplus from the “participating plans” that Anthem has with LACERS. A participating plan is one in which the insurance company tracks the claims costs for the insured members and, if the premium is more than the claim costs, then the surplus is refunded. If the claims are more, then the insured (in this example, LACERS) may have to make up the difference.

In addition to a participating contract with Anthem, LACERS also has a “self-funded contract” with Delta Dental. This is like a participating contract except that LACERS takes on all the risk if the premium amount does not cover the claims. LACERS has self-funded its dental plan since Jan. 1, 2019 and has benefited from doing so each year since then. In 2019 the surplus of the budgeted premium over the total cost was nearly $1.7 million; in 2020 it was more than $2.7 million! When added to the $1.8 million in surplus for 2021, the total is $6.2 million that LACERS would not otherwise have had on hand without the self-funded contract with Delta.

The LACERS staff and Board continue to look for innovative ways to keep your benefits high and your costs as low as possible!