Town of Palm Beach Health Insurance Trust

It is a self-insured municipal health fund that pays medical, prescription, and dental claims for the Town of Palm Beach's active employees and eligible retirees. Funding comes from employer contributions allocated annually from the town's general fund and from employee premium shares. The trust holds those contributions in a dedicated, irrevocable portfolio segregated from other town assets.

The trust follows a capital-preservation strategy centered on short-duration fixed-income instruments, U.S. Treasuries, agency securities, and high-grade money market funds. The investment policy prioritizes liquidity and principal safety over yield, as benefit obligations roll over annually rather than accumulating for decades. Any equity or alternative allocation would be minimal and capped by Florida's statutory guidelines for local-government self-insurance pools.

A board of trustees appointed by the Town Council of Palm Beach governs the fund. The board typically includes the town's finance director, human resources manager, and one or more independent residents with financial expertise. Day-to-day administration and claims processing are often outsourced to a third-party administrator under board supervision.

The Florida Retirement System is a statewide defined-benefit pension fund covering retirement benefits. The Town of Palm Beach Health Insurance Trust is a separate single-employer health and welfare fund that covers only medical and related insurance claims, not pension checks. It serves only Palm Beach municipal workers and is not pooled with any other Florida city or county.

The dynamics differ. Because the trust matches near-term liabilities rather than accumulating assets for distant pension payouts, it is not subject to unfunded actuarial accrued liability in the pension sense. However, it faces annual funding pressure from rising healthcare costs—particularly specialty pharmaceuticals, stop-loss insurance premiums, and an aging retiree pool—that must be absorbed by adjustments to town contributions or benefit design.