TITLE 6 PRIMARY
AND SECONDARY EDUCATION
CHAPTER 50 INSURANCE
PART 7 WAIVER OF PARTICIPATION IN AUTHORITY
COVERAGE OFFERINGS BY
SCHOOL
DISTRICTS AND CHARTER SCHOOLS-MINIMUM BENEFIT AND
STANDARDS
6.50.7.1 ISSUING
AGENCY: New Mexico Public School Insurance Authority.
[6.50.7.1 NMAC - Rp,
6 NMAC 50.7.1, 09/01/2014]
[The address of
the New Mexico Public School Insurance Authority is 410 Old Taos Highway, Santa
Fe, New Mexico 87501.]
6.50.7.2 SCOPE: This
part applies to all school districts and charter schools.
[6.50.7.2 NMAC - Rp,
6 NMAC 50.7.2, 09/01/2014]
6.50.7.3 STATUTORY
AUTHORITY: Subsection D of Section 22-29-7, NMSA 1978, directs the authority to
promulgate necessary rules, regulations and procedures for the implementation
of the New Mexico Public School Insurance Authority Act, Section 22-29-1 et
seq., NMSA 1978.
[6.50.7.3 NMAC - Rp,
6 NMAC 50.7.3, 09/01/2014]
6.50.7.4 DURATION: Permanent.
[6.50.7.4 NMAC - Rp,
6 NMAC 50.7.4, 09/01/2014]
6.50.7.5 EFFECTIVE
DATE: September 1, 2014 unless a later date is cited
at the end of a section.
[6.50.7.5 NMAC - Rp,
6 NMAC 50.7.5, 09/01/2014]
6.50.7.6 OBJECTIVE: The
objective of this part is to establish the procedures for school districts and
charter schools to obtain a waiver of participation in authority coverage
offerings.
[6.50.7.6 NMAC - Rp,
6 NMAC 50.7.6, 09/01/2014]
6.50.7.7 DEFINITIONS:
A. “Individual line of coverage” means
either “risk-related” or “group health insurance” as those terms are defined in
Section 22-29-3 NMSA 1978.
B. “Minimum benefit standards” means the
coverages required by the authority in its requests for proposal to the various
insurance carriers.
C. “Minimum financial standards” means the
premiums, deductibles, limits of liability, coinsurance and other financial
parameters associated with the authority coverages as set forth in the requests
for proposal sent to the various insurance carriers.
[6.50.7.7 NMAC - Rp
6 NMAC 50.7.7, 09/01/2014]
6.50.7.8 WAIVER
OF PARTICIPATION: School districts and charter schools shall
participate in and accept all authority offerings, unless the school district
or charter school has applied for and been granted a waiver for an individual
line of coverage by the authority board. If a waiver is granted for
an individual line of coverage, the school district or charter school will not
be provided any insurance protection or coverage by the authority for the
perils covered by that individual line of coverage. The school district or
charter school receiving the waiver accepts the obligation to obtain its own
insurance protection for the perils covered by the individual line of coverage
for which the waiver is granted. A school district or charter school that has
been granted a waiver for an individual line of coverage shall be prohibited
from participating in that individual line of coverage during the contract
period, provided, however, the district or charter school may, if the authority
contract period exceeds four years, again seek participation. However, a school district or charter school
may, if the authority contract period exceeds four years, again seek
participation as if it were another educational entity pursuant to 6.50.4.8
NMAC.
[6.50.7.8 NMAC - Rp,
6 NMAC 50.7.8, 09/01/2014]
6.50.7.9 RESPONSIBILITIES
OF SCHOOL DISTRICTS AND CHARTER SCHOOLS WHICH WAIVE PARTICIPATION IN
AUTHORITY COVERAGES:
A. A school
district or charter school may waive participation in either the risk related
or group
health insurance or both. Pursuant to Subsections C and D of Section
22-29-9, a school district or charter school must waive all risk-related or all
group health insurance coverages or must petition for participation in the
remaining coverages offered by the authority in that particular individual line of coverage.
B. Should a school
district or charter school waive participation in an individual line of coverage,
the school district or charter school shall be responsible for the following
charges:
(1) For risk related coverages, the
school district or charter school shall forfeit to the authority any right to
any return premiums or reserves and shall be responsible to pay to the authority
on demand the cost of any prior losses in excess of premium and all the
appropriate expenses of the authority in defending, settling and administering
any such losses;
(2) For group health
insurance, the school district or charter school shall forfeit to the
authority any right to any return premium or reserves it may be entitled to.
The school district or charter school shall also pay to the authority any funds
paid for prior incurred claims of the school district or charter school in excess
of premium paid by the school district or charter school and shall pay to the
authority all the appropriate expenses of the authority in defending, settling
and administering such claims.
C. Any school
district or charter school waiving participation in an individual line of
coverage shall pay to the authority any sums determined by the authority to be
due in order to hold safe and harmless all other members of the authority from
any adverse financial impact caused by the waiver of coverage. An accounting of
funds and amounts owed by the school district or charter school shall not be
due from the authority until two years after the waiver of participation has
taken effect.
[6.50.7.9 NMAC - Rp,
6 NMAC 50.7.9, 09/01/2014]
6.50.7.10 MINIMUM
BENEFIT AND FINANCIAL STANDARDS: Minimum benefit and financial standards
shall be established by the authority pursuant Subsection B of Section 22-29-9,
NMSA 1978, at the time of the request for proposal process for the line or
lines of coverage proposed to be solicited by the authority. The terms and
conditions of the requests for proposal which specify the minimum benefits and
financial standards which the authority requires potential carriers to respond
to shall also constitute the minimum benefit and financial standards which any
district seeking a waiver of coverage must match.
[6.50.7.10 NMAC - Rp,
6 NMAC 50.7.10, 09/01/2014]
6.50.7.11 BOARD
PROCEDURE FOR CONSIDERING REQUESTS FOR WAIVER:
A. In the event the
authority determines it will issue a request for proposal for either risk-related
or group health insurance because of termination of an existing contract during
its term or because of expiration of an existing contract pursuant to the
contractual term limit, the authority shall issue a schedule for the
procurement. The request for proposal shall contain a proposed time schedule
for responsive offers. The authority shall also set a target date for selection
of a carrier. Sixty days prior to the carrier selection target date, the
authority shall, by ordinary mail, send to each school district and charter
school a copy of the authority’s request for proposal notifying the school districts
and the charter schools that the request for proposal sets forth the minimum
benefits and financial standards for purposes of their opportunity to waive
participation in the individual line of coverage being procured. The authority
shall in the notice to the school districts and charter schools establish a
deadline within which time any school district or charter school desiring a
waiver must submit documentation of its proposal matching the authority’s
minimum benefits and financial standards. A copy of 6.50.7 NMAC shall be
enclosed with the notice.
B. A school district
or charter school that plans to file a request for waiver for any individual
line of coverage shall within 14 calendar days after receiving notice from the
authority as required by Subsection A of 6.50.7.11 NMAC above, file a notice of
intent to file a request for waiver for that particular individual line of
coverage. The purpose of this preliminary filing is to permit the authority to
structure its request for proposal to give notice to any proposed bidders of the
approximate number of school districts and charter schools that may attempt to
waive participation in that individual line of coverage, since this can have a
significant effect on the procurement process.
C. Any school
district or charter school that has filed a notice of intent to file a request
for waiver, may, if the school district or charter school desires to continue
its waiver efforts, seek proposals for insurance through a request for proposal
in accordance with state law. The school district’s or charter school’s request
for proposal shall, as a minimum, contain the minimum employee benefits and
financial standards or the risk-related minimum benefits and financial
standards as required by the authority’s request for proposal. The school
district or charter school may include additional coverages or additional
limits in its request for proposal.
D. After the school
district or charter school receives responses to its request for proposals and
still desires to continue to seek a waiver, it shall prepare a request for
waiver which affirmatively sets forth the coverages, the premiums and a summary
of the school district's or charter school’s data with respect to each of the
criteria set forth in 6.50.7.12 NMAC.
E. The request for
waiver of participation with all documentation shall be filed with the
authority on or before the date on which the authority's request for proposal
requires proposals to be received.
F. Any school
district or charter school that does not timely file a notice of intent to file
for a waiver of participation or a request for waiver of participation is
prohibited from waiving out of the authority coverage.
G. When the
authority receives a request for a waiver of participation, the authority shall
immediately send a notice to the school district or charter school setting
forth the time and place for a public board meeting to consider approval or
rejection of the waiver request. Since
time is of the essence, if necessary, the board shall call a special meeting in
accordance with the Open Meetings Act, Section 10-15-1 et seq., NMSA 1978, to
consider the waiver request.
H. At the meeting,
the school district or charter school will present its proposed coverages and
the costs of those coverages. Then, the
authority’s executive director will explain the comparable coverages to be
offered by the authority and their costs.
The board shall review all documents and information presented orally
and in writing and then shall either make its decision at the meeting or notify
the school district or charter school of the decision in writing within five
calendar days after the meeting.
I. The decision of
the authority board to grant or deny a waiver of participation is final. Any district denied a waiver of participation may appeal such decision. An appeal shall be taken within thirty days
from the date of the board action. Such
appeal is on the record made before the authority board and the board decision
may be reversed only if shown upon a review of the whole record to be
arbitrary, capricious or in violation of law.
[6.50.7.11 NMAC - Rp,
6 NMAC 50.7.11, 09/01/2014]
6.50.7.12 APPROVAL
OR DISAPPROVAL OF REQUEST FOR WAIVER OF PARTICIPATION: The
authority board shall approve or disapprove a waiver of participation based on
the documentation submitted by the school district or charter school. The board
shall grant a waiver to a school district or charter school that shows evidence
to the satisfaction of the board that:
A. In the event the
waiver is with regard to group health insurance:
(1) that the school district
or charter school has secured a valid written enforceable commitment from an
insurer to provide group health insurance;
(2) that the coverage
committed to the school district or charter school and the plan benefits for
their employees is at least as beneficial as the plan being procured by the
authority;
(3) that there are no
more exclusions from coverage and the exclusions are not broader than those set
out in the authority’s request for proposals;
(4) that the deductibles,
stop loss, out of pocket costs, etc., if any, result in no more costs to the
employees than would occur pursuant to
the authority’s request for proposals;
(5) that any cost containment
features not result in any higher costs or burdens on the employees than would
result under the authority’s request for proposals;
(6) that the prospective
insurer of the school district or charter school have the same or greater
rating as that required in the authority’s request for proposals;
(7) that the notice of
intent to request a waiver has been timely filed;
(8) that the request for
waiver of participation has been timely filed;
(9) that all the data
required to be included in the request for waiver of participation has been timely supplied;
(10) that the proposed
insurer for the school district or charter school has satisfactorily
demonstrated to the school district or charter school and to the authority that
the insurer in its proposal to the school district or charter school has
adequately accounted in its rates for such items as school district or charter school
experience, incurred but not reported losses, medical inflation trends and
other relevant factors for the purpose of allowing the school district or
charter school and the authority to
determine the future viability of the plan, if rates are under-quoted at
inception and whether the proposed insurer for the school district or charter
school meets the minimum financial standards of the authority; and
(11) that the total group
health insurance offering available in that school district or charter school
compares favorably in all respects with the authority’s request for proposals;
B. In the event the
waiver is with regard to risk-related insurance:
(1) that the school district
or charter school has secured a valid written enforceable commitment from an
insurer to provide risk-related insurance;
(2) that there are no
more exclusions from coverage and the exclusions are not broader than those in
the authority’s request for proposal;
(3) that the deductibles,
self insured retention, etc., if any, are no higher or result in any more costs to the school
district or charter school than would occur pursuant to the authority’s request
for proposal;
(4) that any cost containment features not
result in any higher costs or burdens on the school district or charter school
than would result under the authority’s request for proposals;
(5) that the prospective
insurers of the school district or charter school provide coverages as broad as
is required in the authority’s request for proposals;
(6) that the prospective
insurers of the school district or charter school have the same or greater
rating as required in the authority’s request for proposals;
(7) that the notice of
intent to request a waver has been timely filed;
(8) that the request for
waiver of participation has been timely filed;
(9) that all the data
required to be included in the request for waiver of participation has been
included; and
(10) that the proposed
insurer for the school district or charter school has satisfactorily demonstrated
to the school district or charter school and to the authority that the insurer
in its proposal to the school district or charter school has adequately
accounted in its rates for such items as school district or charter school
experience, incurred but not reported losses, the nature of existing
coverage(claims made or occurrence) and other relevant factors for the purpose
of allowing the school district or charter school and the authority to determine the future costs
of coverages, to determine if rates are under-quoted at inception and whether
the proposed insurer for the school district or charter school meets the
minimum financial standards of the authority.
[6.50.7.12 NMAC - Rp,
6 NMAC 50.7.12, 09/01/2014]
6.50.7.13 WITHDRAWAL,
FAILURE TO FOLLOW PROCEDURES, EXPIRATION OF WAIVERS:
A. A request for
waiver may be withdrawn at any time prior to or at the scheduled meeting.
B. Failure to
follow the procedures set forth in this rule shall be adequate reason for
rejection of the request for waiver.
C. Any waiver
granted shall automatically expire at the end of the authority insurance
contract for the line of coverage.
[6.50.7.13 NMAC - Rp,
6 NMAC 50.7.13, 09/01/2014]
6.50.7.14 AUTOMATIC
WAIVER ALLOWED: School districts and charter schools are
entitled to an automatic waiver for any line of coverage where the employee
pays the full amount of the premium. If the school district or charter school
desires insurance protection for a particular line of employee-pay-all coverage,
the school district or charter school
must affirmatively petition the authority for coverage. In granting the
coverage the board shall first determine that the school district or charter
school meets the minimum participation requirements as established by the board
from time to time, that the school district or charter school will carry the
coverage through the end of the contract period and that approval will not
jeopardize the stability of the fund.
[6.50.7.14 NMAC - Rp,
6 NMAC 50.7.14, 09/01/2014]
HISTORY of
6.50.7 NMAC:
Pre-NMAC History: The material
in this part was derived from that previously filed with the State Records
Center and Archives under:
NMPSIA 86-101,
Risk-Related Minimum Benefits and Risk-Related Financial Standards, filed
10-31-86;
NMPSIA 86-102,
Waiver Of Participation For Risk-Related Coverages, filed 10-31-86;
NMPSIA 86-203,
Waiver of Participation for Employee-Benefit Coverages, filed 10-31-86;
NMPSIA 88-2,
Definitions, filed 11-4-88;
NMPSIA 93-10,
Employee-Benefit and Risk Related Minimum Benefit and Financial Standards Participation
Waiver, filed 03-22-93;
NMPSIA 86-2,
Definitions, filed 10/31/86;
NMPSIA 93-1,
Definitions, filed 3/22/93.
History of Repealed Material:
6 NMAC 50.7, Employee-Benefit and Risk-Related Minimum Benefit and
Financial Standards Participation Waiver, filed 10/1/97- Repealed effective
09/01/2014.