Municipal pools would report and fund self-paid medical claims

A pool seeking to cover medical and prescription drug claims itself would have to show it can fund its maximum potential costs and certify that funding each year. This applies to municipal insurance pools seeking to provide medical and prescription drug coverage on a self-funded basis. Maximum exposure includes claims, stop-loss costs, administrative costs and other pool obligations. A group that fails the reserve requirements in K.S.A. 12-2621 cannot self-fund under this provision. The pool must have the required funding when it takes on the risk and submit certification each year for the plan year.

Each municipal self-funded medical and prescription drug pool would have to report specified financial information each year; the insurance commissioner could examine and audit its records. This applies to municipal pools that self-fund medical and prescription drug coverage. The annual statement must include total claims paid, the required reserve and adjustments, administrative expenses, actuarial certification and documents showing compliance. The information must be included in the pool’s annual statement.

A municipal self-funded medical and prescription drug pool would have to keep a reserve equal to the greater of 20% of annual claims liability or $4 million in a separate account. This applies to municipal pools that self-fund medical and prescription drug coverage. The reserve may be used for claims and administrative expenses related to medical and prescription drug coverage. An actuary must review the reserve each year. An actuary must review the reserve annually.