[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.
Editor's Note: See 29 U.S.C. § 1001 et seq.
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.