Public entities self-insurance programs (health insurance)

ORS 731.036(6) instructions

Person/Entity: Cities, counties, school districts … or districts defined in ORS 198.010 and 198.180

Activity: Individually or jointly insure to provide health insurance to employees and dependents

Before the public entity establishes a self-insurance program that is exempt from the insurance code, it must demonstrate to the Insurance Division that the program meets the requirements for exemption.

The Insurance Division asks that the public entity provide a cover letter, along with relevant supporting documentation, that addresses each of the requirements listed in order for the self-insurance program to qualify for exemption.

Requirements for exemption

1. The program covers at least 500 members (employees and dependents, retired employees and dependents), 1,000 if entities jointly insure. Provide copies of documents creating and governing the program, and that includes documentation of the number of covered members.
2. The program must include all benefits required of group health insurance policies under ORS 743, 743A and 743B. The program must have program documents that define benefits and administration and provides to enrollees written general information about services provided, access to services, charges, and scheduling applicable to each enrollee's coverage; the program's grievance and appeal process; and other group health plan enrollee rights, disclosures, or written procedure requirements under ORS 743, 743A and 743b.
3. Copies of the forms used to communicate the coverage to members must be filed and confirmed compliant as required in (2) above. Refer to the filing instructions and certification statement needed.
4. The program must comply with the following financial administration requirements:
1. Program contributions and reserves are held in separate accounts and used for the exclusive benefit of the program
2. The program maintains adequate reserves
3. The program obtains adequate reinsurance unless the Insurance Division approves an alternate arrangement.
   The cover letter should explain how the program will comply with these requirements. An actuarial report or other study that includes a schedule of payments established to support the program should be provided.
5. The program must have sufficient personnel to service enrollees or must contract with an Oregon-licensed third-party administrator to provide enrollee services. The cover letter should indicate how the program will comply with this requirement.
6. Provide an audited financial statement (or the annual audit required by ORS 297.425). The most recently available financial statement should be provided with the cover letter. A copy of the financial statement must be filed annually with the Insurance Division. The financial statement should include a schedule setting forth the costs incurred for the program.
7. Provide the federal employer identification number.