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Cabarrus County, North Carolina
<br />Notes to the Financial Statements
<br />For the Year Ended June 30, 2011
<br />At July 1, 1994, the County chose to establish a Workers Compensation Fund (an internal service fund) for risk
<br />associated with the workers compensation plan. The Workers Compensation Fund is where assets are set aside
<br />for claim settlements. At this time the fund is no longer being funded annually. The uninsured risk retention per
<br />accident is $400,000 for workers compensation. The County has purchased excess workers compensation
<br />insurance for claims in excess of that amount.
<br />A liability for a claim is
<br />established if information
<br />indicates that it is probable that
<br />a liability has been incurred at
<br />the date of the financial
<br />statements and the amount of
<br />the loss is reasonably estimable.
<br />The claims liability for fiscal year
<br />ended June 30, 2011 is shown
<br />at right.
<br />Workers Compensation
<br />6/30/2011
<br />Unpaid claims, beginning of fiscal year $ 801,466
<br />Incurred claim (169,279)
<br />Claim payments (632,187)
<br />Unpaid claims, end of fiscal year $ 0
<br />6/30/2010
<br />$ 307,632
<br />1,172,058
<br />(678,224)
<br />$ 801.466
<br />On June 30, 2011, the County transferred the workers compensation program to the Carolina Governmental
<br />Alliance, Inc., a governmental corporation. The change was to streamline the administration of both the liability and
<br />the workers compensation programs by placing them both under the same corporation.
<br />On July 1, 2004, the County chose to establish a Self- Insured Health Insurance Fund (an internal service fund) for
<br />risk associated with the health insurance plan. The Health Insurance Fund is where assets are set aside for claim
<br />settlements. A premium is charged to each fund that accounts for full -time employees plus this benefit is also
<br />offered to retired employees who meet specific criteria. The total charge to each fund is based on actual calculated
<br />cost which includes but not limited to fixed cost, mature claim cost, expected monthly liability and the number of
<br />projected employees who will be covered by insurance.
<br />The uninsured risk retention per claim is $100,000 with an aggregate stop loss of 125 %. This coverage is for
<br />claims incurred and paid in 12 months. The benefits covered are medical MH /SA Pharmacy and Vision.
<br />A liability for a claim is established if
<br />information indicates that it is
<br />probable that a liability has been
<br />incurred at the date of the financial
<br />statements and the amount of the
<br />loss is reasonably estimable. The
<br />current claims liability for fiscal year
<br />ended June 30, 2011 is shown at
<br />right.
<br />In accordance with G.S. 159 -29, the County's employees that have access to $100 or more at any given time of the
<br />County's funds are performance bonded through a commercial surety bond. The Director of Finance and Tax
<br />Collector are each individually bonded for $100,000 each. The remaining employees that have access to funds are
<br />bonded under a blanket bond for $200,000.
<br />The County carries commercial coverage for all other risks of loss including flood loss. There have been no
<br />significant reductions in insurance coverage from the previous year and settled claims have not exceeded coverage
<br />in any of the past three fiscal years.
<br />The Alliance is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors
<br />and omissions, and natural disasters. The Alliance has property, general liability, auto liability, workers'
<br />compensation and medical malpractice liability coverage through an outside agent.
<br />Self- Insured Health Insurance
<br />6/30/2011
<br />6/30/2010
<br />$ 122,643
<br />7,483, 627
<br />(6,370,788)
<br />$1.235.482
<br />Unpaid claims, beginning of fiscal year $1,235,482
<br />Incurred claims 6,594,192
<br />Claim payments (6,524,118)
<br />Unpaid claims, end of fiscal year $1.305.556
<br />66 Attachment number 1
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