New Jersey Administrative Code
Title 11 - INSURANCE
Chapter 4 - ACTUARIAL SERVICES
Subchapter 56 - SELF-FUNDED MULTIPLE EMPLOYER WELFARE ARRANGEMENTS AND INSURED MULTIPLE EMPLOYER ARRANGEMENTS
Section 11:4-56.2 - Definitions

The following words and terms, as used in this subchapter, shall have the following meanings, unless the context clearly indicates otherwise:

"Administrator" means a person, partnership, corporation or other legal entity engaged by a self-funded MEWA, as defined in this section, to act as executive director to carry out the policies established by the trustees and to otherwise administer and provide day-to-day management of the health benefit plans.

"Association" means a group of 100 or more persons organized and maintained in good faith for purposes other than that of obtaining insurance, in active existence for more than one year, having a constitution and by-laws that provide that: the association holds regular meetings not less than annually to further the purposes of the members; except for credit unions, the association collects dues or solicits contributions from members; and the members have voting privileges and representation on the governing board and committees.

"Carrier" means any entity subject to the insurance laws and regulations of this State, or subject to the jurisdiction of the Commissioner, that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of hospital and medical services, including an insurance company authorized to issue health insurance, health maintenance organization, hospital service corporation, medical service corporation, health service corporation or any other entity providing a plan of hospital and medical insurance, benefits or services. The term "carrier" shall not include a joint health insurance fund established pursuant to 18A:18B-1 et seq. and 40A:10-36 et seq.

"Commissioner" means the Commissioner of the New Jersey Department of Banking and Insurance.

"Department" means the New Jersey Department of Banking and Insurance.

"Eligible employee" means a full-time employee who works a normal workweek of 25 or more hours. The term includes a sole proprietor, a partner of a partnership, or an independent contractor, if the sole proprietor, partner, or independent contractor is included as an employee under the health benefits plan of a small employer, but does not include employees who work less than 25 hours a week, work on a temporary or substitute basis or are participating in an employee welfare arrangement established pursuant to a collective bargaining agreement.

"Health benefits plan" means a hospital and medical benefit plan, including insured, self-funded and partially self-funded plans. "Health benefits plan" shall include pharmacy, dental and vision plans that are part of a hospital and medical benefit plan.

"Insured multiple employer arrangement," "insured MEA" or "MEA" means an arrangement established or maintained to provide health benefits to employees and/or their dependents of two or more employers, under an insured plan purchased from a carrier which is not stop-loss insurance as defined at 17B:27A-17 or 11:4-40.2, as appropriate, and shall include, but is not limited to, a multiple employer welfare arrangement, multiple employer trust or other form of benefit trust.

"Qualified actuary" means a member in good standing of the American Academy of Actuaries with at least three years recent experience in health insurance pricing and reserving.

"Risk-based capital" or "RBC" means a method of measuring the minimum amount of capital appropriate for an entity to support its operations in consideration of its size and risk profile. Formulas for calculating RBC are provided in the RBC instructions

"RBC Instructions" means the National Association of Insurance Commissioners (NAIC) RBC Instructions as supplemented by the Commissioner.

"Regulatory action level RBC" means the product of 1.5 and the number determined for the separate trust account under the risk-based capital formula in accordance with the RBC instructions.

"Self-funded" means that the multiple employer welfare arrangement is covered by stop-loss insurance as defined at 17B:27A-17 or 11:4-40.2, as applicable, and that the group retains risk for all losses below the limits of the stop-loss insurance.

"Self-funded multiple employer welfare arrangement" or "Partially self-funded multiple employer welfare arrangement" (collectively, MEWA) means a multiple employer welfare arrangement as defined in 29 U.S.C. § 1002(40), other than a government or church plan as defined at 29 U.S.C. § 1002(32) and (33), respectively, that provides a health benefit plan or plans which cover the employees of at least one employer that is either domiciled in New Jersey or has its principal headquarters or principal administrative office located in New Jersey, and which is not fully insured as defined in 29 U.S.C. § 1144(b)(6)(D).

"Servicing organization" means an individual, partnership, association or corporation, other than the administrator, that has contracted with the MEWA to provide any functions as designated by the trustees with respect to the health benefits plans, including, but not limited to, actuarial services, claims administration, provider networks, cost containment services, legal services, auditing services, financial services, coordination and preparation of plan documents, employee booklets and other documents, stop-loss or reinsurance producer services.

"Small employer" means any person, firm, corporation, partnership, or political subdivision that is actively engaged in business that employed an average of at least two but not more than 50 eligible employees on business days during the preceding calendar year and who employs at least two employees on the first day of the plan year, and the majority of employees are employed in New Jersey. All persons treated as a single employer under subsection (b), (c), (m) or (o) of section 414 of the Internal Revenue Code of 1986 ( 26 U.S.C. § 414) shall be treated as one employer.

"Total adjusted capital" means a self-funded MEWA's statutory capital and surplus held in the separate trust account established for health benefits plans, as determined in accordance with statutory accounting applicable to the annual financial statements, increased or decreased by such other items, if any, as the RBC instructions may provide.