Print Friendly HOUSE BILL NO. 825 – Health care plans, self-funded
HOUSE BILL NO. 825
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H0825......................................................by STATE AFFAIRS
SELF-FUNDED HEALTH CARE PLANS - Adds to existing law relating to joint
public agency self-funded health care plans to set forth a declaration of
purpose; to define terms; to require registration; to set forth exemptions;
to provide qualifications for registration; to provide for application for
registration; to provide for grants or denials of applications; to provide
for trust fund powers and liability; to provide for investment of trust
fund moneys; to require reserves; to provide for records, accounts and
annual statements; to exempt plans from taxes; to provide for examination
of books, records and accounts; to provide for a board of trustees and
administrators; to provide for recovery of depleted funds; to provide for
termination of registration; to provide for the liquidation of a trust
fund; to authorize rules; to set forth penalties; and to set forth mandated
03/15 House intro - 1st rdg - to printing
Rpt prt - to St Aff
03/16 Rpt out - rec d/p - to 2nd rdg
03/17 2nd rdg - to 3rd rdg
03/22 3rd rdg - PASSED - 66-2-2
AYES -- Anderson, Andrus, Barraclough, Bastian, Bayer, Bell, Bilbao,
Black, Block, Boe, Bolz, Brackett, Bradford, Cannon, Chadderdon,
Clark, Collins, Crow, Deal, Denney, Edmunson, Ellsworth, Eskridge,
Field(18), Field(23), Garrett, Hart, Harwood, Henbest, Henderson,
Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews,
McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen, Nonini,
Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche,
Rydalch, Sali, Sayler, Schaefer, Shepherd(2), Shepherd(8), Shirley,
Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail,
NAYS -- Barrett, Wood
Absent and excused -- Bedke, Mr. Speaker
Floor Sponsor - Black
Title apvd - to Senate
03/23 Senate intro - 1st rdg - to Com/HuRes
03/30 Rpt out - rec d/p - to 2nd rdg
03/31 2nd rdg - to 3rd rdg
04/03 3rd rdg - PASSED - 34-0-1
AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough,
Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce,
Richardson, Schroeder, Stegner, Stennett, Werk, Williams
NAYS -- None
Absent and excused -- Sweet
Floor Sponsor - Cameron
Title apvd - to House
04/03 To enrol
04/04 Rpt enrol - Sp/Pres signed - To Governor
04/10 Governor signed
Session Law Chapter 415
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-eighth Legislature Second Regular Session - 2006
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 825
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO JOINT PUBLIC AGENCY SELF-FUNDED HEALTH CARE PLANS; AMENDING TITLE
3 41, IDAHO CODE, BY THE ADDITION OF A NEW CHAPTER 41, TITLE 41, IDAHO CODE,
4 TO SET FORTH A DECLARATION OF PURPOSE, TO DEFINE TERMS, TO REQUIRE REGIS-
5 TRATION, TO SET FORTH EXEMPTIONS, TO PROVIDE QUALIFICATIONS FOR REGISTRA-
6 TION, TO PROVIDE FOR APPLICATION FOR REGISTRATION, TO PROVIDE FOR GRANTS
7 OR DENIALS OF APPLICATIONS, TO PROVIDE FOR TRUST FUND POWERS, TO PROVIDE
8 FOR TRUST FUND LIABILITY, TO PROVIDE FOR INVESTMENT OF TRUST FUND MONEYS,
9 TO REQUIRE RESERVES, TO PROVIDE FOR RECORDS, ACCOUNTS AND ANNUAL STATE-
10 MENTS, TO EXEMPT PLANS FROM TAXES, TO PROVIDE FOR EXAMINATION OF BOOKS,
11 RECORDS AND ACCOUNTS, TO PROVIDE FOR A BOARD OF TRUSTEES AND ADMINISTRA-
12 TORS, TO PROHIBIT CERTAIN PECUNIARY INTERESTS IN PLAN MANAGEMENT, TO PRO-
13 HIBIT POLITICAL CONTRIBUTIONS, TO PROVIDE FOR RECOVERY OF DEPLETED FUNDS,
14 TO PROVIDE FOR TERMINATION OF REGISTRATION, TO PROVIDE FOR THE LIQUIDATION
15 OF A TRUST FUND, TO AUTHORIZE RULES, TO PROVIDE FOR THE APPLICABILITY OF
16 OTHER PROVISIONS, TO SET FORTH PENALTIES, TO SET FORTH MANDATED COVERAGE
17 PROVISIONS RELATING TO CHILDREN AND PREGNANCY, TO PROVIDE FOR SERVICES
18 PROVIDED BY GOVERNMENTAL ENTITIES AND TO REQUIRE MAMMOGRAPHY COVERAGE.
19 Be It Enacted by the Legislature of the State of Idaho:
20 SECTION 1. That Title 41, Idaho Code, be, and the same is hereby amended
21 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
22 ter 41, Title 41, Idaho Code, and to read as follows:
23 CHAPTER 41
24 JOINT PUBLIC AGENCY SELF-FUNDED HEALTH CARE PLANS
25 41-4101. DECLARATION OF PURPOSE. It is the purpose of this chapter to
26 recognize and provide reasonable public supervision of self-funded plans
27 established by public agencies pursuant to a joint powers agreement in accor-
28 dance with chapter 23, title 67, Idaho Code, for provision of health care ser-
29 vice benefits to employees of public agencies in connection with or as an
30 alternative to insurance and other prepayment plans.
31 41-4102. DEFINITIONS. As used in this chapter:
32 (1) "Administrator" means a person, other than a board member, employed
33 by the board to administer a joint public agency self-funded plan.
34 (2) "Beneficiary" means any individual entitled, under the joint public
35 agency self-funded plan, to payment by the trust fund of any part of all of
36 the cost of any health care service rendered to him.
37 (3) "Board of trustees" or "board" is the board of trustees of the trust
39 (4) "Contribution" means the amount paid or payable by the employer or
40 employee into the trust fund.
41 (5) "Director" means the director of the department of insurance of this
2 (6) "Joint powers agreement" means an agreement entered into between pub-
3 lic agencies pursuant to chapter 23, title 67, Idaho Code.
4 (7) "Joint public agency self-funded plan" or "self-funded plan" or
5 "plan" means any public agency plan established by a joint powers agreement
6 and under which payment for any disability benefits not otherwise provided for
7 under title 72, Idaho Code (worker's compensation and related laws -- indus-
8 trial commission), medical, surgical, hospital, and other services for preven-
9 tion, diagnosis, or treatment of any disease, injury, or bodily condition of
10 an employee is, or is to be, regularly provided for or promised from funds
11 created or maintained in whole or in part by contributions or payments thereto
12 by a public agency employer, or by a public agency employer and the employees
13 of the public agency, and not otherwise covered by insurance or contract with
14 a health care service corporation, health maintenance organization, or similar
15 other third party prepayment plan.
16 (8) "Person" means any individual, corporation, association, firm, syndi-
17 cate, organization or other entity.
18 (9) "Public agency" means any city, county or political subdivision of
19 this state, including, but not limited to: counties; school districts; highway
20 districts; port authorities; instrumentalities of counties, county hospitals,
21 cities or any political subdivision created under the laws of the state of
22 Idaho; and the state of Idaho and any agency of the state government. "Public
23 agency" also means any group of more than one (1) of the above public agencies
24 acting together pursuant to a joint powers agreement in accordance with chap-
25 ter 23, title 67, Idaho Code.
26 (10) "Trust fund" means a fund established under a joint public agency
27 self-funded plan for receipt of contributions of employers and employees and
28 payment of or with respect to health care service costs of beneficiaries.
29 41-4103. REGISTRATION REQUIRED -- EXEMPTIONS -- NOT SUBJECT TO INSURANCE
30 CODE. (1) No joint public agency self-funded plan shall operate in this state
31 except while registered with the director as hereinafter provided. Joint pub-
32 lic agency self-funded plans already in operation as of July 1, 2006, shall so
33 register within ninety (90) days of the effective date of this act.
34 (2) No registration shall be required of:
35 (a) Any plan established and maintained for the purpose of complying with
36 any worker's compensation law or unemployment compensation disability
37 insurance law; or
38 (b) Any plan that is primarily for the purpose of providing first aid
39 care and treatment, at a dispensary of an employer, for injury or sickness
40 of employees while engaged in their employment.
41 (3) Plans while so registered shall not be deemed to be engaged in the
42 business of insurance and shall not be subject to provisions of the Idaho
43 insurance code except as expressly provided in this chapter.
44 (4) The plan shall provide to each employer participant and to each pro-
45 spective employer participant a written notice stating that the plan is not
46 insurance and does not participate in the state guaranty association.
47 41-4104. QUALIFICATIONS FOR REGISTRATION. No joint public agency self-
48 funded plan shall register, and the director shall not register a joint public
49 agency self-funded plan, which is not qualified as provided in this section.
50 (1) The joint powers agreement must require all contributions to be paid
51 in advance and to be deposited in and disbursed from a trust fund duly created
52 and existing under an adequate written irrevocable trust agreement between the
53 employer or employers and the board.
1 (2) The plan must:
2 (a) Have, or provide for, a board of trustees in accordance with this
3 chapter for the administration of the plan;
4 (b) Require that all members of the joint powers agreement comply with
5 the provisions of the joint powers agreement;
6 (c) Provide that the administrator or board on behalf of the plan, as the
7 case may be, shall furnish to each employee-beneficiary of the plan a
8 written statement or schedule adequately and clearly stating all benefits
9 currently allowable under the plan, together with all applicable restric-
10 tions, limitations, and exclusions, and the procedure for filing a claim
11 for benefits; and
12 (d) Otherwise be in compliance with the provisions of this chapter.
13 (3) The allocated trust fund must be actuarially sound; that is, assets
14 and income of the fund must be adequate under reasonable estimates for payment
15 of all benefits promised to beneficiaries by the plan. In determining actuar-
16 ial soundness the director shall also give due consideration to:
17 (a) Applicable stop-loss insurance provided or to be provided the plan by
18 an insurer duly authorized to transact disability insurance in this state;
19 (b) Contracts with health care service corporations or health maintenance
20 organizations authorized to conduct such operations in this state and cov-
21 ering certain of the promised benefits;
22 (c) Other applicable insurance or guarantys; and
23 (d) The nature of the participating entities and other plan factors or
24 provisions for prevention or reduction of adverse selection against the
25 plan by those otherwise eligible to become beneficiaries.
26 (4) The plan shall maintain aggregate stop-loss coverage and specific
27 stop-loss coverage provided by an insurance company authorized to transact
28 insurance in this state in accordance with the annual actuarial opinion of the
30 41-4105. APPLICATION FOR REGISTRATION. (1) Application for registration
31 of a joint public agency self-funded plan for public agencies shall be made to
32 the director, on forms furnished and designed by him. The application shall be
33 signed and verified by at least two (2) of the board members.
34 (2) The application shall be accompanied by:
35 (a) A copy of the joint powers agreement under which the joint public
36 agency self-funded plan will exist and operate;
37 (b) A copy of the proposed written statement of benefits referred to in
38 section 41-4104(2), Idaho Code;
39 (c) A financial statement of the trust fund, if already in existence and
40 operating on July 1, 2006. The statement shall be certified by an indepen-
41 dent certified public accountant according to generally accepted account-
42 ing principles;
43 (d) If not already in existence, a written statement of reasonably pro-
44 jected income and disbursements of the trust fund for the twelve (12)
45 month period commencing with date of application and showing also the
46 amount projected as of the end of such period for claims incurred and not
47 paid and incurred and not reported as certified by an actuary having expe-
48 rience in establishing rates for a self-funded plan and the health ser-
49 vices being provided, and who is also a fellow of the society of actuar-
50 ies, a member of the American academy of actuaries, or an enrolled actuary
51 under the employment retirement income security act of 1974;
52 (e) If not already in existence, a copy of a business plan;
53 (f) A copy of an actuarial study determining adequate rates for the plan.
54 The rates shall not be less than the sum of projected incurred claims for
1 the year plus costs of operation plus a reasonable portion of any prior
2 year deficiency less any excess surplus; and
3 (g) Such other relevant documentation and information as the director may
4 reasonably require considering that these entities are public agency plans
5 and not private insurance companies.
6 (3) At the time of filing the application the applicant shall pay to the
7 director a nonrefundable filing fee as provided for by rule.
8 (4) The director shall transmit and account for all fees received by him
9 hereunder as provided in section 41-406, Idaho Code.
10 41-4106. GRANT OR DENIAL OF APPLICATION. The director shall act upon an
11 application for registration of a joint public agency self-funded plan with
12 all reasonable promptness. He may make a reasonable investigation of the pro-
13 posal from the public agency. If the director finds that the application is
14 complete and that the plan meets the qualifications stated in section 41-4104,
15 Idaho Code, he shall issue and deliver a certificate of registration in appro-
16 priate form to the applicant; otherwise, the director shall refuse to register
17 the plan and shall give written notice of such refusal to the applicant, stat-
18 ing the reasons therefor.
19 41-4107. TRUST FUND -- POWERS. In addition to the inherent applicable
20 powers of its public agency members and those of a joint powers entity, the
21 trust fund of a joint public agency self-funded plan shall have power:
22 (1) To have and use an appropriate descriptive name;
23 (2) To sue and be sued in its own name;
24 (3) To contract in its own name. All such contracts in writing shall be
25 signed by the chairman of the board or his or her designee;
26 (4) To borrow money and give security therefor; and
27 (5) To engage exclusively in transactions authorized or required by this
28 chapter, or reasonably incidental thereto.
29 41-4108. TRUST FUND LIABILITY. (1) The trust fund of a joint public
30 agency self-funded plan shall be legally liable for payment of all applicable
31 benefits stated in the statement or schedule of benefits in effect at the time
32 a claim thereunder arises and subject to the terms of the joint powers agree-
34 (2) Funds in the trust fund are fiduciary funds, and are not liable for
35 any obligation of any employer participant in the plan, nor subject to gar-
36 nishment or levy for the obligation of the beneficiary. This subsection (2)
37 shall not be deemed to prohibit levy upon the trust fund by any provider
38 thereof, or its assignee, for health care services rendered a beneficiary if
39 the trust fund has theretofore agreed in writing to pay for the same direct to
40 such provider.
41 41-4109. INVESTMENT OF TRUST FUND. (1) The board may invest reserves and
42 other funds available for the purpose in the trust fund of a joint public
43 agency self-funded plan in the following kinds of investments only:
44 (a) General obligations of the United States government, or of any state,
45 district, commonwealth or territory of the United States, or of any munic-
46 ipality, county, or other political subdivision or agency thereof.
47 (b) Obligations, the payment of principal and interest of which is guar-
48 anteed by any such government or agency.
49 (c) Corporate bonds and similar obligations meeting the requirements
50 specified for investment of funds of insurers under section 41-711, Idaho
1 (d) Collateral loans, payment of principal and interest of which is ade-
2 quately secured by securities in which the trust fund could lawfully
3 invest directly.
4 (e) Deposits, savings accounts, and share accounts in established banks
5 and savings and loan associations located in the United States.
6 (2) In addition to investments excluded under subsection (1) of this sec-
7 tion, the board is expressly prohibited from investing trust fund moneys in:
8 (a) Any loan to or security of any employer participating in the plan, or
9 to or of any officer, director, subsidiary or affiliate of any such
11 (b) The security of any person in which a member of the board, adminis-
12 trator, or any consultant of the plan has a direct or indirect material
13 pecuniary interest.
14 (c) Real estate or loans thereon.
15 (d) Any personal loan, other than a collateral loan referred to in sub-
16 section (1)(d) of this section, but subject to paragraphs (a) and (b) of
17 this subsection (2).
18 (3) All such investments shall be made and held in the name of the trust
19 fund, and the interest and yield thereon shall inure to the account of the
20 trust fund.
21 (4) No investment shall be made unless authorized in writing by the board
22 and so shown in the records of the trust fund.
23 (5) Any person who authorizes any investment of trust fund moneys in
24 violation of this section shall, in addition to other penalty therefor, be
25 liable for all loss suffered by the trust fund on account of the investment.
26 (6) No investment made in violation of this section shall constitute an
27 "asset" in any determination of the financial condition of the trust fund.
28 41-4110. RESERVES. (1) A joint public agency self-funded plan shall
29 establish and maintain in its trust fund the following reserves:
30 (a) A reserve in an amount as certified by a member of the American acad-
31 emy of actuaries as being necessary for payment of claims against the
32 trust fund for benefits, including both claims reported and not yet paid
33 and claims incurred but not yet reported. Any joint public agency self-
34 funded plan in existence as of July 1, 2006, shall also have three (3)
35 years from the effective date of this act to fund the applicable reserves.
36 (b) If under the plan periodic contributions of either the employer or
37 employees to the trust fund are payable less frequently than monthly,
38 there shall be a reserve for unearned contributions as computed pro rata
39 on the basis of the unexpired portion of the period for which the contri-
40 bution has been paid.
41 (2) In any determination of the financial condition of the trust fund the
42 claims reserve and reserve for unearned contributions shall constitute liabil-
44 41-4111. RECORDS AND ACCOUNTS -- ANNUAL STATEMENT. (1) The board of a
45 joint public agency self-funded plan shall cause full and accurate records and
46 accounts to be entered and maintained covering all financial transactions and
47 affairs of the trust fund.
48 (2) Within ninety (90) days after the close of a fiscal year of the plan,
49 the board shall make an annual statement in writing summarizing the financial
50 transactions of the trust fund for such fiscal year and its financial condi-
51 tion at the end of such year in accordance with this chapter and generally
52 accepted and applicable accounting principles. The statement shall be in the
53 form as prescribed by the director and the financial information therein shall
1 be certified by an independent public accountant by whom such information was
2 prepared. The board shall keep a copy thereof on file in the business office
3 of the plan where it shall be available at all reasonable times for a period
4 of not less than three (3) years for review by any beneficiary and shall
5 deliver a copy of a financial summary to each participating employer.
6 (3) On or before expiration of such ninety (90) day period the board
7 shall cause an original of the annual statement to be filed with the director.
8 The joint public agency self-funded plan shall not be subject to any filing
9 fees provided for by rule. The director may grant a thirty (30) day extension
10 of the time for filing the annual statement.
11 (4) The board shall also file quarterly supplemental financial reports in
12 a form and at the times prescribed by the director.
13 (5) The annual and quarterly reports required under this section shall be
14 public records.
15 41-4112. TAXES -- EXEMPTION. Any plan established under this chapter is
16 not subject to any state tax, including a premium or maintenance tax.
17 41-4113. EXAMINATION OF BOOKS, RECORDS AND ACCOUNTS. (1) The books,
18 records, accounts and affairs of a joint public agency self-funded plan shall
19 be subject to examination by the director, by competent examiners duly autho-
20 rized by him in writing, at such times or intervals as the director deems
21 advisable. The purposes of the examination shall be to determine compliance of
22 the plan with applicable laws, financial condition and actuarial adequacy of
23 its trust fund, treatment accorded beneficiaries, and as to other factors
24 materially related to the plan's management and operation.
25 (2) The board shall promptly make the books, records and accounts of the
26 plan and trust fund available in Idaho to the examiner and otherwise facili-
27 tate the examination.
28 (3) The examiner shall conduct the examination expeditiously, make his
29 report of the examination in writing, and deliver a copy thereof to the board
30 and to the director. The board shall have four (4) weeks after receipt of the
31 report within which to recommend to the director such corrections or changes
32 therein as the board may deem appropriate. After making such corrections or
33 changes, if any, as he deems proper, the director shall file the report in his
34 office as a document open to public inspection, and deliver to the board a
35 copy of the report as so corrected or changed.
36 (4) Since a joint public agency self-funded plan is funded by local tax
37 moneys, the costs of the examination shall not be borne by the plan or trust
38 fund of the plan.
39 41-4114. BOARD OF TRUSTEES -- ADMINISTRATORS. (1) The trust shall be gov-
40 erned and managed by a board of trustees. This board shall consist of members
41 elected by the governing boards of the member public agencies. The composition
42 and membership of the board shall be established in the joint powers agreement
43 between the members. The process and procedure for conducting the election and
44 determining the members shall be set forth in the joint powers agreement
45 establishing the plan, except that the election must be conducted, completed
46 and results certified by December 31 of each year in which an election for
47 members is conducted. Boards of joint public agency self-funded plans existing
48 as of July 1, 2006, shall be deemed to be in compliance with the establishment
49 requirements of this chapter but shall conduct future elections in accordance
50 with the requirements of this chapter.
51 (2) An individual, firm or corporation may be an administrator of a plan.
52 (3) The board shall cause all individuals handling receipts and disburse-
1 ments for the trust fund to be covered under a dishonesty insurance policy or
2 surety bond in an amount not less than ten percent (10%) of the annual contri-
3 butions to the plan or as the director may deem reasonably advisable, issued
4 by an insurer authorized to transact such insurance in this state. This policy
5 shall only be canceled upon giving no less than thirty (30) days' notice to
6 the board and to the director. The cost of the insurance shall be borne by the
7 trust fund. The amount of any policy or bond required under this section shall
8 be not less than twenty-five thousand dollars ($25,000) or more than five hun-
9 dred thousand dollars ($500,000).
10 41-4115. PROHIBITED PECUNIARY INTERESTS IN PLAN MANAGEMENT. No board mem-
11 ber, administrator or other person having responsibility for the management of
12 a joint public agency self-funded plan or the investment or other handling of
13 plan funds shall:
14 (1) Receive directly or indirectly or be pecuniarily interested in any
15 fee, commission, compensation, or emolument, other than salary or other com-
16 pensation regularly fixed and allowed for services regularly rendered to the
17 plan, arising out of any transaction to which the trust fund is or is to be a
19 (2) Receive compensation as a consultant to the plan while also acting as
20 a board member or administrator, or as an employee of either; or
21 (3) Have any direct or indirect material pecuniary interest in any loan
22 or investment of the trust fund.
23 41-4116. POLITICAL CONTRIBUTIONS PROHIBITED. No board shall make or know-
24 ingly permit the making, directly or indirectly, of any political contribution
25 by or from any joint public agency self-funded plan trust fund.
26 41-4117. RECOVERY OF DEPLETED FUNDS. If after notice and hearing the
27 director finds that any joint public agency self-funded plan trust fund has
28 been depleted by reason of any wrongful or grossly negligent act or omission
29 of a board member or any other person, he shall transmit a copy of his find-
30 ings to the attorney general of this state, who may bring an action in the
31 name of the people of this state, or intervene in any action brought by or on
32 behalf of an employer or beneficiary, for the recovery of the amount of such
33 depletion, for the benefit of the trust fund.
34 41-4118. TERMINATION OF REGISTRATION. (1) The director may terminate the
35 registration of a joint public agency self-funded plan upon written request of
36 the board, or if he finds, after an examination, that the trust fund is insol-
38 (2) The director may terminate the registration of a plan for violation
39 of this chapter, or failure of the board to file the annual statement with the
40 director within the time required under section 41-4111, Idaho Code, or if he
41 finds, after an examination of the trust fund or the plan:
42 (a) That the plan no longer meets the qualifications required by sections
43 41-4101 and 41-4110, Idaho Code, and that the deficiency will not or can-
44 not be remedied within a reasonable time;
45 (b) That as a matter of frequent practice the benefits promised by the
46 plan are not being fairly and promptly paid;
47 (c) That the cost of administering the plan is excessive in relation to
48 the character and volume of service being rendered in the administration;
50 (d) That the trust fund has been subject to fraudulent or dishonest prac-
51 tices on the part of the board, administrator, consultant, any participat-
1 ing employer, or beneficiaries.
2 (3) The director shall so terminate the registration by his written order
3 given to the board and to each employer last of record a participant in the
4 plan. The order shall state the grounds upon which it is made and its effec-
5 tive date. The order shall be subject to judicial review in the same manner as
6 applies to official orders of the director in general.
7 41-4119. LIQUIDATION OF TRUST FUND. (1) Upon termination of registration
8 the trust fund of a joint public agency self-funded plan shall be liquidated.
9 (2) Liquidation of a solvent joint public agency self-funded plan shall
10 be conducted by its trustee under a plan of liquidation in writing filed with
11 the director, found by the director to be fair and equitable to all persons
12 having a pecuniary interest in the trust fund, and approved by him. Any bal-
13 ance remaining after payment or adequate provision for all claims and charges
14 against the trust fund shall be disposed of in such manner as is provided for
15 in the plan of liquidation. Unless under the plan of liquidation liability for
16 all unpaid claims and obligations of the trust fund has been assumed by other
17 financially responsible person or persons, the existence of surplus funds for
18 such disposition shall not be determined prior to expiration of two (2) years
19 after termination of the registration.
20 (3) The liquidation of an insolvent joint public agency self-funded plan
21 shall be carried out by the director in accordance with chapter 33, title 41,
22 Idaho Code (supervision, rehabilitation and liquidation), and for this purpose
23 the joint public agency self-funded plan shall be deemed to be an insolvent
24 domestic insurer.
25 41-4120. RULES. (1) The director may make reasonable rules necessary for
26 or as an aid to effectuation of any provision of this chapter. No such rule
27 shall extend, modify, or conflict with any provision of this chapter and the
28 reasonable implications thereof nor any of the administrative, statutory or
29 constitutional rights and responsibilities of a public agency.
30 (2) Such rules, or any amendment thereof, shall be made by the director
31 in accordance with chapter 52, title 67, Idaho Code.
32 41-4121. OTHER PROVISIONS APPLICABLE. Chapter 2, title 41, Idaho Code
33 (the director of the department of insurance), chapter 13, title 41, Idaho
34 Code (trade practices and frauds), and sections 41-2141(1) and 41-2216(1),
35 Idaho Code (coordination of benefits, except to the extent the rules pertain
36 to medicare coverage), to the extent applicable and not in conflict with the
37 express provisions of this chapter, shall also apply with respect to joint
38 public agency self-funded plans, and for the purpose such plans shall be
39 deemed to be "insurers."
40 41-4122. PENALTIES. (1) Any person who violates or causes or induces
41 violation of any provision of this chapter or any lawful rule of the director
42 issued hereunder, shall be subject to an administrative penalty for each
43 violation of not more than one thousand dollars ($1,000) for an individual and
44 not more than five thousand dollars ($5,000) for any entity.
45 (2) Any person who makes a false statement or representation of a mate-
46 rial fact, knowing it to be false, or who knowingly fails to disclose a mate-
47 rial fact in any application, examination, or statement required under this
48 chapter or by lawful rule of the director hereunder, shall be subject to pen-
49 alty as provided in subsection (4) of this section.
50 (3) Any person who makes a false entry in any book, record, statement, or
51 report required by this chapter or lawful rule of the director thereunder to
1 be kept by him for any joint public agency self-funded plan, with intent to
2 injure or defraud the fund or any beneficiary thereunder, or to deceive any
3 person authorized or entitled to examine the affairs of the plan, shall be
4 subject to penalty as provided in subsection (4) of this section.
5 (4) For each such violation, act or omission referred to in subsections
6 (2) and (3) of this section, unless greater penalty is provided therefor under
7 any other applicable law, the offender shall upon conviction thereof be sub-
8 ject to a fine of not more than fifteen thousand dollars ($15,000) and to
9 imprisonment for not more than fifteen (15) years, or to both such fine and
11 41-4123. COVERAGE FROM MOMENT OF BIRTH -- COMPLICATIONS OF PREGNANCY. (1)
12 Every joint public agency self-funded plan issued in this state or providing
13 coverage to any covered family residing within this state, shall contain a
14 provision granting immediate accident and sickness coverage, from and after
15 the moment of birth, to each newborn child or infant of any covered family,
16 including a newborn child placed with the adoptive covered family within sixty
17 (60) days of the adopted child's date of birth. Coverage under the joint pub-
18 lic agency self-funded plan for an adopted newborn child placed with the adop-
19 tive covered family more than sixty (60) days after the birth of the adopted
20 child shall be from and after the date the child is so placed. Coverage pro-
21 vided in accordance with this section shall include, but not be limited to,
22 coverage for congenital anomalies. For the purposes of this section, "child"
23 means an individual who has not reached eighteen (18) years of age as of the
24 date of the adoption or placement for adoption. For the purposes of this sec-
25 tion, "placed" shall mean physical placement in the care of the adoptive cov-
26 ered family, or in those circumstances in which such physical placement is
27 prevented due to the medical needs of the child requiring placement in a medi-
28 cal facility, it shall mean when the adoptive covered family signs an agree-
29 ment for adoption of such child and signs an agreement assuming financial
30 responsibility for such child. Prior to legal finalization of adoption, the
31 coverage required under the provisions of this subsection (1) as to a child
32 placed for adoption with a covered family continues in the same manner as it
33 would with respect to a naturally born child of the covered family until the
34 first to occur of the following events:
35 (a) The date the child is removed permanently from that placement and the
36 legal obligation terminates; or
37 (b) The date the covered family rescinds, in writing, the agreement of
38 adoption or agreement assuming financial responsibility.
39 No such plan may be issued or amended if it contains any disclaimer,
40 waiver, or other limitation of coverage relative to the coverage or insurabil-
41 ity of newborn or adopted children or infants of a covered family covered from
42 and after the moment of birth that is inconsistent with the provisions of this
44 (2) An insurer shall not restrict coverage under a joint public agency
45 self-funded plan of any dependent child adopted by a participant or benefi-
46 ciary, or placed with a participant or beneficiary for adoption, solely on the
47 basis of a preexisting condition of the child at the time the child would
48 otherwise become eligible for coverage under the plan, if the adoption or
49 placement for adoption occurs while the participant or beneficiary is eligible
50 for coverage under the plan.
51 (3) No joint public agency self-funded plan which provides maternity ben-
52 efits for a person covered continuously from conception shall be issued,
53 amended, delivered, or renewed in this state if it contains any exclusion,
54 reduction, or other limitations as to coverage, deductibles, or coinsurance
1 provisions as to involuntary complications of pregnancy, unless such provi-
2 sions apply generally to all benefits paid under the plan. If a fixed amount
3 is specified in such plan for surgery, the fixed amounts for surgical proce-
4 dures involving involuntary complications of pregnancy shall be commensurate
5 with other fixed amounts payable for procedures of comparable difficulty and
6 severity. In a case where a fixed amount is payable for maternity benefits,
7 involuntary complications of pregnancy shall be deemed an illness and entitled
8 to benefits otherwise provided by the plan. Where the plan contains a mater-
9 nity deductible, the maternity deductible shall apply only to expenses result-
10 ing from normal delivery and cesarean section delivery; however, expenses for
11 cesarean section delivery in excess of the deductible shall be treated as
12 expenses for any other illness under the plan.
13 For purposes of this subsection (3), involuntary complications of preg-
14 nancy shall include, but not be limited to, puerperal infection, eclampsia,
15 cesarean section delivery, ectopic pregnancy, and toxemia.
16 All plans subject to this subsection (3) and issued, amended, delivered,
17 or renewed in this state shall be construed to be in compliance with this sec-
18 tion, and any provision in any such plan which is in conflict with this sec-
19 tion shall be of no force or effect.
20 41-4124. SERVICES PROVIDED BY GOVERNMENTAL ENTITIES. (1) From and after
21 July 1, 2006, no joint public agency self-funded plan shall be issued in Idaho
22 which excludes from coverage services rendered the subscriber while a resident
23 in an Idaho state institution, provided the services to the subscriber would
24 be covered by the contract if rendered to him outside an Idaho state institu-
26 (2) From and after July 1, 2006, no joint public agency self-funded plan
27 may contain any provision denying or reducing benefits otherwise provided
28 under the policy for the reason that the person insured is receiving health or
29 mental health care or developmental services provided by the department of
30 health and welfare, whether or not the department of health and welfare bases
31 its charges for such services on the recipient's ability to pay. Provided,
32 nothing in this section shall prevent the issuance of a contract which
33 excludes or reduces benefits where the charge level or amount of the charge
34 levied by a governmental entity for such services would vary or be affected in
35 any way by the existence of coverage under a joint public agency self-funded
37 41-4125. MAMMOGRAPHY COVERAGE. (1) From and after July 1, 2006, all joint
38 public agency self-funded plans which provide coverage for the surgical proce-
39 dure known as a mastectomy which are delivered, issued for delivery, continued
40 or renewed in this state shall provide minimum mammography examination or
41 equivalent examination coverage. Such coverage shall include at least the fol-
42 lowing benefits:
43 (a) One (1) baseline mammogram for any woman who is thirty-five (35)
44 through thirty-nine (39) years of age.
45 (b) A mammogram every two (2) years for any woman who is forty (40)
46 through forty-nine (49) years of age, or more frequently if recommended by
47 the woman's physician.
48 (c) A mammogram every year for any woman who is fifty (50) years of age
49 or older.
50 (d) A mammogram for any woman desiring a mammogram for medical cause.
51 Such coverage shall not exceed the cost of the examination.
52 (2) As used in this section, "mastectomy" means the removal of all or
53 part of the breast for medically necessary reasons as determined by a licensed
2 (3) Nothing in this section shall apply to specified accident, specified
3 disease, hospital indemnity, medicare supplement, long-term care or other lim-
4 ited benefit health insurance policies.
STATEMENT OF PURPOSE
This legislation would create a new chapter of the insurance code to
regulate self-funded health plans offered to employees of governmental
entities when the self-funding arrangement involves more than one
employer. Currently a self-funded health plan offered by a group of
governmental entities to their employees would be regulated under
Chapter 40 of Title 41, Idaho Code. If the plan includes only
counties, there is no regulation of the plan by the Department of
Insurance due to an existing exemption in Chapter 40 for self funded
plans offered by a county. This legislation would make all self-
funded multiple employer plans offered by governmental entities in
Idaho, including a plan made up exclusively of counties, subject to
regulatory oversight by the Department of Insurance under a special
chapter of the code. It would not affect single employer plans.
The legislation would require, among other things, that multiple
governmental employer plans file annual financial statements that have
been prepared by a CPA with the Department of Insurance, that they
rely on opinions from a qualified actuary in establishing rates and
setting aside appropriate reserves to cover expected losses, that the
plans have appropriate stop loss coverage in place to protect against
catastrophic losses and that all plan funds be maintained in a trust
account. The level of regulation imposed by this legislation is
significantly less than the level of regulation applied to insurance
companies, but greater than what is applied to multiple employer plans
under current law.
This bill will create some added costs to the Department of Insurance
because it requires that the Department bear all costs associated with
examining the public agency plans covered by this chapter. However,
because the Department is funded from fee revenue rather than the
general fund, the increased costs will impact the general fund only to
the extent that there is a reduction in any surplus fee revenue that
would otherwise flow to the general fund. Examination costs for a
single entity would generally be expected to run between five and ten
thousand dollars every three years. This bill also exempts public
agency plans from all state taxes. Currently, there is only one
existing plan that would fall within this chapter. It is not regulated
by the Department of Insurance and does not pay any premium tax or
subscriber tax through the Department of Insurance, so the exemption
would not create any loss of premium tax or subscriber tax to the
Name: Representative Max Black
Representative Bill Deal
Phone: (208) 332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 825