Benefits Compliance, Health Care Reform

Idaho Self-funded Plans May Soon Register with the State

The Idaho House of representatives recently passed Bill 149, which, if signed into law, will require self-funded plans to register with the Idaho State Department of Insurance (as insured plans are already required to do in all states).

This article provides a high-level overview of the Bill as it stands the date of this article. Many bills are modified throughout the legislative process. If this Bill is passed by both the State House and Senate, and then subsequently signed into law by the Governor, this bill will then enter the regulatory process. It is the regulatory process that puts out the most details about how the new law will be operationalized – based on the final version of the Bill passed and signed into law. While 5% of bills become law, such registrations are common in other states and, therefore, has a good chance of passing into law. Be on the lookout for more on this Bill in the coming year.

Executive Summary

A self-funded plan may be required to register with the Idaho Department of Insurance should this bill become law. A self-funded plan that operates without registering shall be deemed to be engaged in the business of insurance without authorization and any person offering or operating an unregistered plan shall be deemed to be transacting insurance without proper licensing and subject to all sanctions as provided by law. To prepare for compliance, you may have to consider the following:

  • Determine whether each plan is a self-funded plan subject to this new mandate.
  • For each health plan that is subject to state registration: register by the date implicated in the final bill signed into law and file required reports annually.
  • Determine whether other federal laws and state laws apply to your plan.
  • Review operations to identify the flow of required information needed for state registration in order to best capture needed information throughout the year for most efficient registration process, when required.
  • Identify all interested parties (Third Party Administrator (TPA), legal, accounting, consulting, etc.).
    • Review contracts and update, where needed, to ensure responsibility for this registration is properly assigned.

Determine Requirements for Each Health Plan

Insured Health Plan: Plan and Sponsor Have No Additional Registration Requirements
  • Insurer are already responsible for registering with the state for insured plans.
  • Employers sponsoring insured plans with self-funded components may need to register with the state for those self-funded components to their health plan – that means – if an employer / plan sponsor is sponsoring an insured dental plan but a self-funded medical plan: the medical plan will need to register.
Self-funded Health Plan: Plan Sponsors Must Register with State
  • Implement plan compliance processes / procedures for registration compliance
  • Allocate responsibilities between plan/plan sponsor personnel and third-party service providers:
    • Plan administrators may be best suited for registration. Ask your self-funded plan administrator and carriers who will register the plan. Ensure to document compliance– including receiving confirmation from your plan carrier and administrator affirming their responsibility to register.
  • Ensure that third parties with needed plan information is coordinated with to ensure compliance responsibilities are determined ahead of the registration date.
Self-funded Plans Exempt from State Registration Requirement
  • Disability plans intended to cover deductibles of less than $5,000
  • Unemployment Disability
  • Plans offering first-aid or onsite clinics for purposes of providing first-aid care, injury or sickness while at work.
  • Workers Compensation
  • Stand-alone dental or vision plans offering no more than $5,000 in benefits annually to each beneficiary (example of a plan that is not stand-alone: the employee receives dental/vision as a bundle along with their self-funded medical plan).
  • Federal and state governments are exempt from full compliance for a period of five years if they have a self-funded plan in place on or before July 1, 2019. They must still register, however.

Special Rules

Post-secondary Education
  • Any self-funded plan providing benefits to students of a postsecondary educational institution shall provide to each student participant and to each prospective student participant written notice that the plan is not insurance and does not participate in the Idaho life and health guaranty association. The notice shall also be included as part of all marketing materials used by or on behalf of the plan.
  • Any plan registered as a postsecondary educational institution student health benefit plan shall not operate as or be registered as a single employer plan or as a multiple employer welfare plan.
Plans with More than One Employer Group
  • Shall provide to each employer participant and to each prospective employer participant written notice that the plan is not insurance and does not participate in the Idaho life and health guaranty association.
Registration Requirements

Idaho Department of Insurance »

The Idaho Department of Insurance already mandates registration for some plans, per the link above. Including already requiring post-secondary institutions to provide the notice mentioned herein to the left, as well as registration for insured plans and Multi-Employer Welfare Arrangements (MEWA) – plans with more than one employer group enrolled.

Although this Bill is still in the legislative process and not yet law, it is likely that if / when it is law, the registration requirements will be similar to, if not nearly identical, to that which already exists for the above-mentioned plans (see link above for the Idaho Department of Insurance for a full explanation of these requirements.

State Registration Requirements

  • Trust / Trustee & Reserve Requirements
  • Quarterly financial statements due 60 days after each quarter-end (may be unaudited)
  • Annual audited financial statements are due 90 days after the plan’s fiscal year-end
  • Annual certified actuarial opinion
  • Annual continuation fee of $500 and Annual taxes of $0.04 per beneficiary (see Tax Filing Requirements)

Additionally, the following must be filed not less than thirty (30) days before the effective date:

  • An actuarial study calculating new rates for the next plan year or more frequent period if there are any midterm rate changes;
  • Any changes in the policy form, benefits or summary plan description;
  • Any amendments or changes made to the stop-loss agreement or agreements, including change of carriers;
  • Any amendments or changes made to administrative, service or management agreements;
  • Any amendments or changes to the fidelity bond or other coverage deemed equivalent;

Resources

For more information, see the House Bill 149 here.

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