Current through Register Vol. 56, No. 6, March
18, 2024
(a) A
self-funded MEWA shall establish and maintain a separate trust account with
respect to that segment of its operations that provides for self-funded health
benefits plans. The trust account shall reflect the income, disbursements,
assets and liabilities associated with providing health benefits. At all times,
the trust account shall contain assets in an amount at least equal to the sum
of its liabilities, including the claim reserve account, plus the required
RBC.
(b) The separate trust account
described in (a) above shall maintain capital and surplus at the following
minimum levels:
1. For the calendar year
ending December 31, 2003, 90 percent of the regulatory action level RBC
determined in accordance with the RBC instructions;
2. For the calendar year ending December 31,
2004, 95 percent of the regulatory action level RBC determined in accordance
with the RBC instructions; and
3.
For the calendar years ending on or after December 31, 2005, the regulatory
action level RBC determined in accordance with the RBC instructions.
(c) If the total adjusted capital
of the self-funded MEWA's separate trust account is less than its regulatory
action level RBC, the self-funded MEWA shall implement and file with the
Commissioner, no later than March 31 of each year, a plan to correct the
inadequacy. Such plan shall:
1. Identify the
conditions that contribute to the inadequacy;
2. Contain proposals of corrective actions
that the MEWA intends to take and that would be expected to result in the
elimination of the inadequacy;
3.
Provide projections of the separate trust account's financial results for the
current year and at least the two succeeding years, both in the absence of
proposed corrective actions and giving effect to the proposed corrective
actions, including projections of statutory balance sheets, operating income,
net income, capital and surplus, and RBC levels; and
4. Identify the key assumptions impacting the
projections, and the sensitivity of the projections to the assumptions, and
identify the quality of, and problems associated with, the operations of the
separate trust account.
(d) The self-funded MEWA shall correct the
inadequacy described in (c) above within 90 days of implementation of the plan,
or no later than June 30 of each year.
(e) The self-funded MEWA shall maintain a
deposit in the amount of not less than $ 200,000 in cash or securities as
defined in
17B:18-37.
(f) The self-funded MEWA shall maintain a
cash reserve for loss in an amount established by a qualified actuary as being
adequate to provide for all incurred losses, including unpaid claims.
(g) The self-funded MEWA shall maintain
stop-loss coverage, which shall meet the following requirements:
1. Aggregate stop-loss coverage shall be
maintained with a retention level of 125 percent of expected claims per year,
including provisions to cover incurred, unpaid claims liability in the event of
termination or liquidation of the self-funded MEWA;
2. Aggregate stop-loss coverage shall provide
coverage for claims in excess of the retention limit in an amount of at least
25 percent of expected claims;
3.
Specific stop-loss coverage shall be maintained with a retention level
determined annually by a qualified actuary based on sound actuarial
principles;
4. The stop-loss
agreement shall provide a minimum run-out period for reporting claims of 12
months beyond the incurral period, except that the Commissioner shall permit a
run-out period for reporting claims of six months beyond the incurral period
if, upon written request of the self-funded MEWA, the Commissioner determines
that it has been demonstrated that coverage with a 12-month run-out period is
not commercially available or is unreasonably priced; and
5. The stop-loss agreement shall contain a
provision that the stop-loss insurer shall give the self-funded MEWA and the
Commissioner a minimum of 180 days notice of cancellation or nonrenewal.
