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.
[6.50.7.8 NMAC - Rp, 6 NMAC
50.7.8, 09/01/2014; A, 12/10/2024]
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; A, 12/10/2024]
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 30 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; A, 12/10/2024]
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 authority 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 as necessary, 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; A, 12/10/2024]
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 10/31/1986;
NMPSIA 86-102, Waiver Of
Participation For Risk-Related Coverages, filed 10/31/1986;
NMPSIA 86-203, Waiver of
Participation for Employee-Benefit Coverages, filed 10/31/1986;
NMPSIA 88-2, Definitions,
filed 11/4/1988;
NMPSIA 93-10,
Employee-Benefit and Risk Related Minimum Benefit and Financial Standards
Participation Waiver, filed 03/22/1993;
NMPSIA 86-2, Definitions,
filed 10/3119/86;
NMPSIA 93-1, Definitions,
filed 3/22/1993.
History of Repealed Material:
6
NMAC 50.7, Employee-Benefit and Risk-Related Minimum Benefit and Financial
Standards Participation Waiver, filed 10/1/1997- Repealed effective 09/01/2014.