[HISTORY: Adopted by the Township Council of the Township of Parsippany-Troy Hills as indicated in article histories. Subsequent amendments noted where applicable.]
Personnel policies — See Ch. 57.
Editor's Note: Former Ch. 33, Interlocal and Intermunicipal Agreements, adopted 10-28-1986 by Ord. No. 86:72 (§ 2-19 of the 1986 Code), as amended, was repealed 12-20-2005 by Ord. No. 2005:31.
Article I Self-Funded Insurance Plan; Self-Insurance Fund
[Adopted 12-20-2016 by Ord. No. 2016:31]
Editor's Note: This ordinance superseded former Art. I, Self-Insurance for Health Care, adopted 7-5-2016 by Ord. No. 2016:14.
There is hereby established a combined self-funded health insurance plan and self-funded workers' compensation plan for Township employees to be collectively known as the "Township of Parsippany-Troy Hills 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 "Township of Parsippany-Troy Hills 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 article, the agreement between the Township 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 the Township Business Administrator, the Township Chief Financial Officer, and one official of the Township and a Secretary of the Commission to be appointed by the Mayor, with the advice and consent of the Township Council. 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 Township Council. Vacancies occurring on the Commission shall be filled for the unexpired term through appointment by the Mayor. The Commissioners shall forthwith after appointment organize for the ensuing year by electing a Chairman from among their membership.
In order to maintain the efficient, professional and actuarially sound operation of the Fund, the Township will contract with a qualified TPA to assist the Township 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 Township's established investment policy and as provided by law and approved by the Township CFO, 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 and take such other action as is necessary to effectuate the Fund and the contract with the TPA regarding the Fund.
The purpose of the Fund is to hold, manage and distribute funds 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 claims payments to assure that sufficient assets are available to continue to pay all claims and expenses in a high claims year.
Claims shall be administered and paid, after review, by the TPA in accordance with the TPA administration contract. The TPA shall assure that all Township employees covered by the Plan are fully informed as to the proper procedure for submitting claims and that all notices required by law with respect to the Plan are promptly provided to the plan participants.
The Township, 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 Township in consultation with the Commissioners and the TPA, and run-out coverage to allow 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 Township 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 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, the approval or denial of individual claims shall in all cases be determined by the terms of the Plan.
The Commission shall annually, in consultation with the Township Council and coordination with its TPA and other professional consultants, review and evaluate the Plan, and evaluate the Plan in comparison to plan designs offered by the New Jersey State Health Benefit Plan. The base plan option of the Township's Plan shall be modified to mirror the design of the base plan option offered by the State Health Benefit Plan. This review shall occur at the same time as the annual open enrollment period. At no time will the Township be required to offer base plan benefits greater than those offered by the State Health Benefit Plan.
The Fund shall continue from year to year without lapse until the Self-Funded Insurance Plan is terminated by action of the Township 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 Township's general fund.