[HISTORY: Adopted by the Mayor and Council of the City of
Hoboken 2-17-2016 by Ord. No. Z-396. Amendments noted where applicable.]
There is hereby established a partially self-funded health insurance
plan for City employees to be known as the "City of Hoboken Self-Funded
Insurance Plan" (the "plan"). There is further established, in accordance
with the provisions of N.J.S.A. 40A:10-6 et seq., an insurance fund
to be known as the "City of Hoboken Self-Insurance Fund" (the "fund").
The plan and the fund shall be operated and maintained in accordance
with the terms of: i) N.J.S.A. 40A:10-6 et seq.; ii) this chapter,
the agreement between the City and its third-party administrator ("TPA"),
any final nonappealable directives issued by a governmental agency
with respect to the plan (collectively, the "plan documents"); and
iii) the rules and regulations promulgated by the Department of Community
Affairs.
There is hereby established, in accordance with the requirements
of N.J.S.A. 40A:10-8, a Fund Commission (the "Commission") consisting
of three officials of the City together with a Secretary of the Commission
to be appointed by the Mayor. The Commissioners shall hold office
for two years or for the remainder of their term as officials, whichever
is less, and until their successors shall have been duly appointed
and qualified. The Secretary shall serve at the pleasure of the Commission.
The Commissioners shall serve without compensation. The compensation
of the Secretary, if any, shall be established and authorized by the
City Council. Vacancies occurring on the Commission shall be filled
for the unexpired term. The Commissioners shall forthwith after appointment
organize for the ensuing year by electing a Chairperson from among
their membership.
In order to maintain the efficient, professional and actuarially
sound operation of the fund, the City will contract with a qualified
TPA to assist the City and the Commission in the proper design and
administration of the plan. Subject to consultation and review by
the Mayor, the Commissioners shall have the power and duty to oversee
the TPA, adopt rules and regulations for the control and investment
of the fund, assure that the fund has sufficient funds for payment
of losses and claims, invest assets of the fund in accordance with
the City's established investment policy and as provided by law,
and assure the proper operation of the plan and the fund consistent
with their purpose. The Commission shall have the authority to authorize
and effectuate the payment of fund-related claims, prior to the approval
of such fund-related claims on the City's official claims list
where necessary, and the Chairperson shall be designated as the certifying
and approving officer for the fund-related claims, pursuant to N.J.S.A.
40A:5-17a(1). The Commission shall take such other action as is necessary
to effectuate the fund and administer the contract with the TPA regarding
the fund, and shall report the payment of fund-related claims to the
City Council within a reasonable period of time following the accrual
of said fund-related claims.
The purpose of the fund is to hold, manage and distribute in
accordance with the plan documents. The fund exists to pay health-care
claims and related expenses covered by the plan, and the fund shall
not be used for any other purpose.
The Commissioners and the TPA shall cause the fund to achieve
a reasonable reserve of up to one year of health-care claims payments
to assure that sufficient assets are available to continue to pay
all claims and expenses in a high claims year.
Health-care claims shall be administered and paid, after review,
by the TPA in accordance with the TPA administration contract. The
TPA shall assure that all City employees covered by the plan are fully
informed as to the proper procedure for submitting health-care claims
and that all notices required by law with respect to the plan are
promptly provided to the plan participants.
The City, directly or through the TPA, shall arrange for the
purchase of stop loss or excess coverage in order to provide ascertainable
limits to the liability of the fund. Such coverage shall include,
but need not be limited to, coverage for catastrophic illness for
plan participants, aggregate coverage (below catastrophic coverage)
to assure that the plan's risk level is capped at a maximum amount
as established by the City in consultation with the Commissioners
and the TPA, and run-out coverage to allow health-care claims incurred
during the plan year to be paid out for a period of three months after
the end of the plan year. The plan shall also include a requirement
that the City shall, directly or through the TPA, contract for liability
insurance pursuant to the Employee Retirement Income Security Act
of 1974 ("ERISA"), which shall include responsibility for handling all second-level
appeals.
Appeals from denial of health-care claims shall, in the first
instance, be reviewed by the TPA. In considering appeals, any relevant
supplemental information provided by the plan participant or the service
provider shall be considered. Second-level appeals shall be handled
by a third party retained to review appeals on an independent basis
according to the plan documents. In order to assure that the plan
is consistently, fairly and equitably administered, no member of the
City Council shall be involved in the approval or denial of individual
health-care claims, which in all cases shall be determined by the
terms of the plan.
The Commission shall annually, in consultation with the City
Council and coordination with its TPA and other professional consultants,
review and evaluate the plan and shall evaluate the plan in comparison
to current plan designs at least annually, and said review will occur
prior to the open enrollment period.
The fund shall continue from year to year without lapse until
the self-fund insurance plan is terminated by formal action of the
City Council. In the event of such a termination, after payment of
all claims and expenses of the plan, any fund balance remaining shall
revert to the City's General Fund.