Self-funded Health Care Plans

Self-funded health care plans are risk-bearing entities required to register with the Department. The purpose of registering is to provide reasonable supervision of self-funded or partially self-funded plans that provide health care benefits in Idaho. Whether a single employer plan, multiple employer welfare arrangement (MEWA), post-secondary student health plan, or joint-public agency plan, the following application requirements are applied consistently to provide standards for financial soundness of such plans and protect the interests of the Idahoans participating in them.

Please review and provide each of the following 13 application requirements to complete an application.

Please be advised:

ERISA Single-Employer Plans: Federal ERISA law preempts the requirement to register for private, single-employer plans. This does not extend to MEWA’s. It is the responsibility of the self-funded plan to maintain compliance with Federal and State laws. However, If you are uncertain in any regard about the requirement for your self-funded plan to register in Idaho, please contact the Department for a courtesy evaluation. 

Timelines: Statute provides for a 90-day review period of a complete application. An application is considered complete when all required  parts and documents are received by the Department in their final form. It is the responsibility of the applicant to compile and complete the application. It is also the responsibility of the applicant to manage timelines, providing a sufficient period for the statutory review, and be granted registration prior to offering any benefits.

These forms and procedures are designed to facilitate an expedient review of the application. Therefore, it is extremely important that an application conform to the instructions below. This list may not provide all the information or requirements that will be needed to register a self-funded plan. You will be advised if your unique application requires any additional registration information. 

Please submit the following:

1. Application Fee: $500:
   
   The application fee of $500 is due at the time of application. The fee is non-refundable.

   Application fees are payable by check to the following address. Include the applicant’s identifying information with the check:

Idaho Department of Insurance
700 W. State St., 3rd Floor
P.O. Box 83720
Boise, Idaho 83720-0043

2. Application for Registration Form:

   Self-Funded Plan Application Form. This form should disclose the nature of the applying plan’s operations, participation expectations, and expected contracted service providers. Additional explanations of the self-funded plan may be attached as needed. The form must be signed by at least one representative of the sponsoring entity and a Trustee.

3. Sponsoring Entity Articles, Bylaws, and a Funding Plan:

   Any entity acting as a sponsor to a self-funded plan, whether a single employer, MEWA (which includes Association Health Plans), or Joint Public Agency, must include with their application the sponsoring entity’s Articles of Incorporation and Bylaws plus any equivalent founding documentation pertinent to the management and operation of the proposed self-funded plan in Idaho (e.g., Joint Powers Agreement, Power of Attorney, Membership Rules and Guidelines, etc.).

   A plan explaining the initial funding of the Trust fund must also be included. The funding plan should explain in detail who the funds are coming from, when, and demonstrate that the Trust fund will begin operations with balances sufficient to meet the statutory requirements for reserves and surplus.

4. Irrevocable Trust Agreement:

   Provide a copy of the irrevocable trust agreement under which the trust fund will exist and operate in Idaho. The trust agreement must comply with Idaho Code, Title 41, and contain the conditions set forth in Chapter 40 or Chapter 41.

5. List of Trustees, and Biographical Affidavits:

   Provide a list of the Trustees to be appointed and act as fiduciaries of the irrevocable trust, administering the self-funded health care plan. Each Trustee must submit a Biographical Affidavit with original signatures and notarizations, available here: https://content.naic.org/sites/default/files/ucaa-industry-naic-biographical-affidavit.pdf

   Note, third party verification background reports are not required for the Trustee Biographical Affidavits.

6. Trustee Conflict of Interest Statements:

   Idaho Code requires that each Trustee have no conflict of interest and no pecuniary interest in the Trust. Each Trustee to be appointed must provide a copy of a conflict of interest statement acknowledging as much. It is recommended that a Trust and Trustees complete a conflict of interest statement each year after registration to ensure and maintain ongoing compliance.

7. Written Statement of Benefits:

   Provide a copy of the proposed written statement of benefits to be reviewed by the Rates and Forms Section. The plan benefit documents: SBC, SPD, Checklist, and IDFF Form are required. The benefit statements should be in compliance with all requirements of Idaho Code, Title 41, Chapters 40 or 41 and any other applicable requirements set forth in Idaho law as interpreted by the Rates and Forms Section. The forms should not include any terms that could misconstrue or imply that the policy is one of insurance.

   Additionally, all updates to rates and forms, whether basic annual updates or interim period changes, must be filed with the DOI for review prior to being used to confirm ongoing compliance.

8. Certification of Contribution Rates by an Actuary:

   Provide a certified statement attesting to actuarial soundness of the plan’s proposed contribution rates. Include the actuarial report prepared by a qualified actuary certifying that the rates for the plan are sufficient to cover moderately adverse experience and all costs of operation with a reasonable contribution to surplus. The study shall include the development and justification of the assumptions used by the actuary in determining the rates. Also, include the employer and employee contribution percentages and the period of time for which rates may be deemed valid. A qualified actuary must certify the statement.

9. Pro Forma Financials, By Month:

   In conjunction with the Actuary’s Certification of Rates, provide a pro forma balance sheet and income statement for the first twelve (12) months of operation of the plan, by month, commencing with the expected start date of the plan in Idaho. To verify compliance, the balance sheet should include: the amounts of investments by type; reserves for claims incurred but not paid and incurred but not reported (as certified by an actuary) and any other liabilities on an accrual basis; and surplus sufficient to exceed minimum requirements in Idaho Code where applicable. The income statement should reflect contributions and changes in claims liability, being detailed enough to identify significant expenses of the Trust by month.

10. Stop Loss Insurance Policy:

    Provide copies of all stop loss agreements that include applicable stop-loss insurance provided, or to be provided, the plan by an insurer duly authorized to transact disability insurance in this state. Self-funded plans must maintain aggregate stop-loss coverage and specific stop-loss coverage provided by an insurance company authorized to transact insurance in this state, unless otherwise stipulated and subject to prior approval by the Department.

    Note: the stop loss policy must agree with the assumptions of the Actuary’s Certification of Contribution Rates, or else the actuary will likely have to update their rate assumptions and calculations.

1. Fidelity Bond:

   Provide a copy of the Trust’s fidelity bond or coverage deemed to be equivalent by the Director of the Department of Insurance, in compliance with Idaho Code. This bond is required for the Trust regardless of any other third-party administrator bonding. The bond or equivalent coverage should be in the name of the Trust (not an employer or sponsor entity).

   If registering under Chapter 40, Title 41, Idaho Code, the bond must contain the language outlined in IDAPA 18.04.05.027.02, “Cancellation of Bond Requirements”:

   The bond must contain specific language stating “that it is noncancellable except upon not less than thirty (30) days advance notice in writing to the trustee and the Director. A copy of any notice cancelling a bond required under Chapter 40, Title 41, Idaho Code, is to be forwarded to the Director by the surety at the same time it is forwarded to the trustee.”

2. Copies of All Contracts between the Trust and any other Party:

This includes :
o    Contract(s) with the actuary providing the: 1) annual Certification of Contribution Rates; 2) annual Actuarial Opinion certifying the adequacy of reserves and surplus at year end; and 3) quarterly reasonable adjustments to claims reserves, incurred but not reported. These may be provided by different actuaries with separate contracts.

o    Contract with the certified public accountant to perform the annual GAAP audit of the Trust.

o    Contract(s) with any third-party administrator(s) or insurer(s) to act as administrator, manager, or service provider to the Trust.

o    Contract(s) with banks and financial institutions for the establishment of accounts and signatories authorized to access the Trust fund.

o    Contract(s) and written statements of duties with employees of the sponsoring entity to provide services to the irrevocable trust, a separate entity. These are required to be in writing and agreed to by the Trustees, even if the services are provided on an unpaid basis as part of an employee’s job duties with the sponsor entity.

13. Additional Information, Required as Applicable:

    If applicable, provide the following with the application:

    o    Payment of back-due Premium Taxes if operating without registration. Self-funded plans pay a premium tax of $0.04 per participant per month through the Premium Tax section.

    o    Copies of all marketing materials and solicitations to be utilized in Idaho. This may include any content containing information regarding the Trust on a plan or sponsor’s website.

    o    A copy of any study made of the proposed self-funded health care plan by a consultant for the information or guidance of an employer or sponsoring entity.

    o    If an AHP, verification of M-1 and Form 5500 filings with the Federal DOL – EBSA.

    o    Other information as requested by the Department.

There are many filings required to be filed by a self-funded plan to maintain their registration. Each serves in a different way to ensure the Trustees, acting as fiduciaries, are administering the plan in compliance with Idaho Code and protecting the best interests of the plan participants. The following list is not all-inclusive, but does include key required filings:

• 60-Days prior to Year End/New Plan Year: Actuarial Certification of Rates, and Plan Benefit Documents: SPD, SPC, Checklist, and IDFF Form. While statute requires 30-days prior, the Department requests 60-days to allow time for review and proper prior approval.
• March 15: Immunization Assessment
• 90-days after year end:
  • Annual CPA Audit accompanied by the Actuarial Opinion on Reserves and Surplus.
  • Fees: $500 continuation fee and premium taxes at a rate of $0.04 per participant per month are due annually, payable through the Taxes & Fees electronic system.
• May 1: Health Plan Survey
• 60-day after each quarter: Quarterly financials including reserves for IBNR that are reasonably adjusted by an Actuary. 
• All interim period changes due, 30-days prior to change: Any Changes or Amendments to bonding, stop-loss, the Trust agreement or contracts involving the Trust must be filed 30-days in advance of the proposed effective date of the change. This includes annual renewals of agreements where coverage periods are updated and any terms are adjusted.