hb 0603

CHAPTER 251

HB 603-FN-A - FINAL VERSION

AN ACT providing the commissioner of administrative services an option to self-fund the state employee health plan and requiring a reserve fund therefor.

SPONSORS: Rep. Stone, Rock 7; Rep. Anderson, Merr 7; Rep. Almy, Graf 14; Rep. L. Fraser, Merr 9; Sen. Wheeler, Dist 21

This bill permits the commissioner of administrative services to contract for a self-insured, group health plan for state employees. It also requires that self-insured, group health plans maintain a reserve fund to cover certain claims and expenses.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT providing the commissioner of administrative services an option to self-fund the state employee health plan and requiring a reserve fund therefor.

Be it Enacted by the Senate and House of Representatives in General Court convened:

251:1 State Employees Group Insurance; Permissible Contracts. Amend RSA 21-I:28 to read as follows:

21-I:28 Contract. The commissioner of administrative services shall be authorized to enter into permanent group life insurance [~~and group hospitalization, hospital medical care, surgical care and other medical and surgical benefits~~] contracts with an insurance company or companies, or other group licensed to do business in the state of New Hampshire. The commissioner of administrative services shall be authorized to enter into group hospitalization, hospital medical care, surgical care, and other medical and surgical benefits contracts with an insurance company or companies, third party administrators, or any organization necessary to administer and provide a health plan under the provisions of this subdivision. The commissioner of administrative services, in consultation with the fiscal committee of the general court, shall from time to time assess the medical insurance coverage given by its present insurer and by others in order to determine which of various contracts would best serve the interests of the state employees.

251:2 State Employees Group Insurance; Medical and Surgical Benefits; Self-Funded Alternative Added. Amend RSA 21-I:30, I to read as follows:

I. The state shall pay a premium for each state employee and permanent temporary or permanent seasonal employee as defined in RSA 98-A:3 including spouse and minor, fully dependent children, if any, and each retired employee, as defined in paragraph II of this section, and his or her spouse, or retired employee's beneficiary, only if an option was taken at the time of retirement and the employee is not now living, toward group hospitalization, hospital medical care, surgical care and other medical benefits plan or a self-funded alternative within the limits of the funds appropriated at each legislative session and providing any change in plan or vendor is approved by the fiscal committee of the general court prior to its adoption. Funds appropriated for this purpose shall not be transferred or used for any other purpose.

251:3 New Sections; State Employees Group Insurance; Restrictions on Self-Insured Plans; Reserve Fund Required. Amend RSA 21-I by inserting after section 30-a the following new sections:

21-I:30-b Restrictions on Self-Insured Plans. The following restrictions apply to self-insured group health plans administered under this subdivision:

I. To the extent that the state assumes the risk with respect to the medical and surgical benefits provided under RSA 21-I:30, the state shall maintain a reserve at least equal to the sum of:

(a) An amount estimated to be necessary to pay claims and administrative costs for the assumed risk for 3 months; and

(b) The amount determined annually by a qualified actuary to be necessary to fund the unpaid portion of ultimate expected losses, including incurred but not reported claims, and related expenses incurred in the provision of benefits for eligible participants, less any credit, as determined by a qualified actuary, for excess or stop-loss insurance. The reserve amount shall be maintained in the fund established under RSA 21-I:30-c. If the state self-insures for more than one employee group plan, a reserve meeting the requirements of this paragraph must be maintained for each plan.

II. The state may purchase excess or stop-loss insurance for any plan, with attachment levels and limits as recommended by a qualified actuary.

III. For the purposes of this section, "qualified actuary" shall mean an actuary who is a member of the American Academy of Actuaries qualified as to health reserving methodologies.

21-I:30-c Reserve Fund. In the event that the medical and surgical benefits under RSA 21-I:30 are provided using a self-funded alternative, a reserve fund shall be established to protect the state from unexpected losses and self-insured losses and related expenses incurred in the provision of such a plan. Such reserve fund shall be administered by the commissioner of administrative services and shall be nonlapsing.