Wisconsin Legislature: Ins 8.11

Ins 8.05 Ins 8.05 Registration cancellation. When a registered employee welfare fund is merged or consolidated with another fund, or is terminated, or ceases to cover any person employed in Wisconsin, the trustee of such fund must file written notice of such action with the commissioner of insurance within 30 days after its occurrence. Such notice shall be verified by the oath of the trustee of the fund, or if there is more than one trustee, then by the oaths of at least 2 trustees. If more than 25 persons employed in Wisconsin were covered by such fund, the notice shall include a certified true copy of the resolution of the trustees or of the board of directors of the employer or similar authority under which such action was taken.

Ins 8.05 History History: Cr. Register, July, 1962, No. 79, eff. 8-1-62.

Ins 8.06 Ins 8.06 Annual statement and notice of number of fund participants in Wisconsin, when required.

Ins 8.06(1) (1) An annual statement on form No. 71-9 must be filed under s. 641.13, Stats., by the trustee of every employee welfare fund subject to ch. 641, Stats., for each fiscal year of the fund during which coverage is provided to more than 25 persons employed in Wisconsin. The annual statement must be filed within 5 months after the close of the fiscal year of the fund.

Ins 8.06 Note Note: Ch. 641, Stats., was repealed by 2003 WisAct 261.

Ins 8.06(2) (2) The trustee of every employee welfare fund subject to ch. 641, Stats., within 5 months after the close of its first fiscal year during which less than 26 persons employed in Wisconsin were covered, must file a written notice with the commissioner of insurance that less than 26 persons employed in Wisconsin participated in the fund during such year. Such notice will remain in effect for all subsequent years until the first year thereafter during which more than 25 persons employed in Wisconsin participate at any time. The filing of a notice under this rule does not relieve the trustee of a fund from the responsibility to file an annual statement for any year during which more than 25 persons employed in Wisconsin participate in the fund. If an annual statement must be filed for any year after a notice has been filed, the procedure of filing a notice will again apply for the first year thereafter during which coverage is provided to less than 26 persons employed in Wisconsin. Such renewed notices shall have the same force and effect as an initial notice.

Ins 8.06 Note Note: Chapter 641, Stats., was repealed by 2003 Wis. Act 261.

Ins 8.06(3) (3) When an employee welfare plan which covers more than 25 persons employed in Wisconsin is terminated and fund assets are completely distributed or paid over to another fund, an annual statement must be filed under s. 641.13, Stats., within 5 months after the date of final distribution of the fund. Such annual statement must report the affairs of the fund from the date of the last previous annual statement and must reflect the final accounting of the fund for the transfer or distribution of all its assets.

Ins 8.06 Note Note: Ch. 641, Stats., was repealed by 2003 WisAct 261.

Ins 8.06(4) (4) When an employee welfare plan is terminated but assets are held for distribution at a later date, the fund remains subject to ch. 641, Stats., as long as at least one Wisconsin employee participates. Annual statements must be filed by the trustee of any such fund for every year in which more than 25 persons employed in Wisconsin participate at any time. Notice under sub. (2) must be given for the first fiscal year in which less than 26 persons employed in Wisconsin participate. Notice of termination of the fund must be given in accordance with s. Ins 8.05.

Ins 8.06 Note Note: Chapter 641, Stats., was repealed by 2003 Wis. Act 261.

Ins 8.06 History History: Cr. Register, July, 1962, No. 79, eff. 8-1-62; am. Register, November, 1978, No. 275, eff. 12-1-78.

Ins 8.07 Ins 8.07 "Persons employed in this state". The term "persons employed in this state" as used in ch. 641, Stats., includes both active employees in Wisconsin and retired or terminated persons participating in the fund who were employed in Wisconsin at the time of retirement or other separation. The term includes anyone whether or not a resident of Wisconsin, who is employed at a place of business maintained by an employer in the state of Wisconsin; however, an employee who is not regularly employed at a place of business maintained by an employer shall be deemed to be employed in Wisconsin if service is performed solely within Wisconsin, or if service is performed partly within Wisconsin and partly outside of Wisconsin and

Ins 8.07 Note Note: Chapter 641, Stats., was repealed by 2003 Wis. Act 261.

Ins 8.07(1) (1) The service outside of Wisconsin is incidental to service within Wisconsin (for example, is occasional, temporary or transitory in nature) or

Ins 8.07(2) (2) The base of operations is in Wisconsin, or

Ins 8.07(3) (3) If there is no base of operations, then the place from which the service is directed or controlled is in Wisconsin.

Ins 8.07 Note Note: Example: A seller who spends 20% of the hours of employment in Wisconsin and who works from a base of operations in Wisconsin would be "employed in this state". A seller who spends 50% of the hours of employment in Wisconsin but who works from a base of operations outside of Wisconsin would not be "employed in this state". A seller whose service is performed primarily in Wisconsin (service outside of the state is only occasional) is"employed in this state" even though the base of operations is in another state or is directed or controlled from another state.

Ins 8.07 History History: Cr. Register, July, 1962, No. 79, eff. 8-1-62; am. (intro.), Register, November, 1978, No. 275, eff. 12-1-78; correction made under s. 13.93 (2m) (b) 5., Stats., Register, April, 1992, No. 436.

Ins 8.08 Ins 8.08 Availability of information to fund participants. The following information shall be available to all fund participants, including covered employees and their beneficiaries, contributing employers and participating labor organizations, in the office of the fund at all reasonable hours: (In the case of a fund which is administered solely by an employer or union, a separate fund office may not be maintained. In such case the following information must be available at the principal office of the employer or union in this state.)

Ins 8.08(1) (1) Copy of registration statement under s. 641.08, Stats., including all current fund documents specified by such statement. A fund which covers less than 26 persons employed in Wisconsin must maintain such documents although it is not required to file them with the commissioner of insurance under s. Ins 8.04.

Ins 8.08 Note Note: Section 641.08, Stats., was repealed by 2003 WisAct 261.

Ins 8.08(2) (2) Copies of annual statements under s. 641.13, Stats., for the 3 latest fiscal years.

Ins 8.08 Note Note: Section 641.13, Stats., was repealed by 2003 WisAct 261.

Ins 8.08(3) (3) Copy of latest report of examination of the fund by the commissioner of insurance.

Ins 8.08 History History: Cr. Register, July, 1962, No. 79, eff. 8-1-62; am. (1) and (2), Register, November, 1978, No. 275, eff. 12-1-78.

Ins 8.09 Ins 8.09 Preservation of records. The trustee of every employee welfare fund subject to ch. 641, Stats., shall maintain the books and records of such fund in sufficient detail to permit a thorough examination of the operations of such fund by the commissioner of insurance for a period of 5 years after the close of the fiscal year of such fund in which the entries in such books or records are made. Such books and records shall include all journals, ledgers, checks, vouchers, invoices, receipts, bank statements, minutes, resolutions, agreements, contracts and other records of original or final entry. The preservation of photographic reproductions of such records shall constitute compliance with the requirements of this rule.

Ins 8.09 Note Note: Chapter 641, Stats., was repealed by 2003 Wis. Act 261.

Ins 8.09 History History: Cr. Register, July, 1962, No. 79, eff. 8-1-62; am. Register, November, 1978, No. 275, eff. 12-1-78.

Ins 8.11 Ins 8.11 County and school district self-insured employee health care benefits: excess or stop-loss insurance requirements.

Ins 8.11(1) (1) Purpose. This section interprets ss. 59.52 (11) (c) and 120.13 (2) (c), Stats., for the purpose of prescribing detailed requirements for excess or stop-loss insurance for self-insured employee health care benefit plans provided by counties or school districts.

Ins 8.11(2) (2) Scope. This section applies to any county or school district that alone or together with one or more counties or one or more school districts provides employee health care benefits on a self-insured basis to less than 1,000 covered employees.

Ins 8.11(3) (3) Definitions. In this section:

Ins 8.11(3)(a) (a) "Aggregate claims" means total actual claim amounts incurred under the employee health care benefit plan during a benefit period.

Ins 8.11(3)(b) (b) "Aggregate deductible" means the aggregate amount of liability specified in the excess or stop-loss insurance contract at or below which the county or school district remains liable for payments for eligible claims.

Ins 8.11(3)(c) (c) "Benefit period" means a twelve-month accounting or reporting period of the employee health care benefit plan.

Ins 8.11(3)(d) (d) "Coinsurance" means a fixed percentage of each claim established in the employee health care benefit plan which the county or school district is obligated to pay for each person covered in the plan.

Ins 8.11(3)(e) (e) "Covered employees" means employees participating in an employee health care benefit plan.

Ins 8.11(3)(f) (f) "Employees eligible to participate" means employees who are eligible to be covered employees under the terms of the employee health care benefit plan.

Ins 8.11(3)(g) (g) "Employee health care benefit plan" means a self-insured plan established by one county or school district or jointly by 2 or more counties or 2 or more school districts to provide health care benefits to employees eligible to participate in the plan.

Ins 8.11(3)(h) (h) "Expected claims" means the most accurate actuarial estimate of aggregate claims during a benefit period.

Ins 8.11(3)(i) (i) "Incurred" means to have provided or furnished a service or item to an employee or dependent covered under an employee health care benefit plan for which a charge for a covered expense is made.

Ins 8.11(3)(j) (j) "Maximums" means the largest total amount of claims per person established by the employee health care benefit plan which the county or school district is obligated to pay.

Ins 8.11(3)(k) (k) "Paid basis" means the application of a claim payment to the aggregate deductible for the benefit period in which the payment is actually made, regardless of when the claim is incurred.

Ins 8.11(3)(L) (L) "Quota share reinsurance" means insurance purchased for the employee health care benefit plan which pays the plan a predetermined fixed percentage of each claim.

Ins 8.11(4) (4) Excess or stop-loss insurance requirements.

Ins 8.11(4)(a)(a) Excess or stop-loss insurance required by s. 120.13 (2) (c), Stats., shall provide coverage for all claims incurred during the term of the policy or contract at a level at which an actuary has certified that the probability that aggregate claims will exceed 125% of expected claims is less than 5%.

Ins 8.11(4)(b) (b) Each employee health care benefit plan shall be covered by one excess or stop-loss insurance policy that satisfies par. (a), regardless of the number of counties or school districts participating in the plan.

Ins 8.11(4)(c) (c) Notwithstanding par. (a), a county or school district that self-insures employee health benefits under a plan in which an actuary has certified that the probability that aggregate claims will exceed 125% of expected claims is less than one-half percent need not purchase excess or stop-loss insurance.

Ins 8.11(5) (5) Excess or stop-loss insurance provided on a paid basis.

Ins 8.11(5)(a)(a) Excess or stop-loss insurance required by s. 120.13 (2) (c), Stats., may provide coverage on a paid basis.

Ins 8.11(5)(b) (b) Upon termination for any reason of an excess or stop-loss insurance policy that provides coverage on a paid basis, the policy shall apply all claims incurred but not paid prior to the termination of the policy to the aggregate deductible of the benefit period in which the service or item was provided or furnished to an employee or dependent under the self-insured employee health care benefit plan.

Ins 8.11(6) (6) Actuarial certification.

Ins 8.11(6)(a)(a) Every county or school district with a plan that is subject to s. 120.13 (2) (c), Stats., shall file with the commissioner of insurance within 30 days after the effective date of the self-insured employee health care benefit plan, every 3 years thereafter and whenever a material change occurs to the plan, an actuarial certification that includes information on:

Ins 8.11(6)(a)1. 1. The number of employees eligible to participate in the plan and the number of covered employees in the plan.

Ins 8.11(6)(a)2. 2. A description of the plan's coverage including but not limited to an outline of benefits provided, deductibles, coinsurance, maximums and quota share reinsurance, if any.

Ins 8.11(6)(a)3. 3. A statement that the plan satisfies the excess or stop-loss insurance requirements specified in sub. (4).

Ins 8.11(6)(a)4. 4. Except for a county or school district with a plan subject to s. 641.08, Stats., a copy of the excess or stop-loss insurance contract and of the plan for self-insuring.

Ins 8.11 Note Note: A county or school district with a plan subject to ch. 641, Stats., must already file this information with the commissioner.

Ins 8.11 Note Note: Chapter 641, Stats., was repealed by 2003 Wis. Act 261.

Ins 8.11(6)(b) (b) The actuarial certification required in par. (a) may be filed by an actuary employed by the excess or stop-loss insurer or by an actuary independent of the excess or stop-loss insurer.

Ins 8.11(6)(c) (c) Two or more counties or 2 or more school districts that jointly establish an employee health care benefit plan shall designate the individual who will file the actuarial certification required in par. (a). Only one actuarial certification shall be filed for the plan.

Ins 8.11 Note Note: The commissioner of insurance will utilize the following tables to evaluate actuarial certifications for accuracy and compliance with this section. The following example illustrates the application of the tables. This example only gives a basic description of how to use the following tables. It may be necessary to extrapolate or interpolate from the information given in the tables in order to apply the tables to a particular plan. An actuary or other qualified person should be consulted to be certain that a plan meets the requirements of sub. (4). Also note that no table provides a description of dental or vision plan benefits. Under sub. (4) (c), many dental or vision plans may not need to purchase stop-loss insurance.

Ins 8.11 Note Example

Ins 8.11 Note Assume a school district has a self-insured employee health care benefit plan that covers 250 employees and family members. The plan offers individual specific stop-loss of $25,000 and provides benefits with a $500.00 deductible per person, 80% coinsurance and $1,000.00 out-of-pocket limit per person.

Ins 8.11 Note The plan's stop-loss coverage and benefit package are the same as that used in Table 7. Therefore, use Table 7 for determining whether the plan meets the requirements in sub. (4).

Ins 8.11 Note In Table 7, use the 125 percent of mean line. Since sub. (4) (a) deals with "125% of expected claims," refer to the 125% of mean line when using any of the tables.

Ins 8.11 Note To determine whether the probability that aggregate claims will exceed 125% of expected claims is less than 5%, subtract the decimal numbers shown in the tables from the number "1". For example, for a plan offering the benefits described in Table 7 and having 25 employees, the probability that aggregate claims will exceed 125% of expected claims is 28% (1 minus .72= .28). It is 26% for 50 employees (1 minus .74), 23% for 100 employees (1 minus .77), etc.

Ins 8.11 Note In this example, the plan covers 250 employees. Table 7 shows that at 250 employees, the probability that aggregate claims will exceed 125% of expected claims is 18% (1 minus .82).

Ins 8.11 Note In order to comply with the rule, this probability must be less than 5%. In this example, the probability is 18%. Therefore, the school district or county must purchase aggregate stop-loss insurance at a level sufficient to bring this probability down to less than 5%. Stop-loss insurance is sold at various levels, including a level at which the probability that aggregate claims will exceed 125% of expected claims is less than 5%. At a minimum, the school district or county should purchase stop-loss insurance at this level. - See PDF for table

Ins 8.11(7) (7) Actuary qualifications. The actuarial certification specified in sub. (6) shall be signed by an actuary who satisfies the requirements of s. Ins 6.12.

Ins 8.11 History History: Cr. Register, April, 1988, No. 388, eff. 5-1-88; correction in (1) made under s. 13.93 (2m) (b) 7., Stats., Register October 2002 No. 562.

subch. II of ch. Ins 8 Subchapter II — Employee Benefit Plan Administrators

Ins 8.20 Ins 8.20 Purpose. This subchapter interprets and implements ch. 633, Stats.

Ins 8.20 History History: Cr. Register, April, 1992, No. 436, eff. 5-1-92.

Ins 8.22 Ins 8.22 Definitions. In this subchapter:

Ins 8.22(1) (1) "Administrator" has the meaning given in s. 633.01 (1), Stats.

Ins 8.22(2) (2) "Commissioner" means the commissioner of insurance.

Ins 8.22(3) (3) "Employee" has the meaning given in s. 633.01 (2), Stats.

Ins 8.22(4) (4) "Office" means the office of the commissioner.

Ins 8.22(5) (5) "Plan" has the meaning given in s. 633.01 (4), Stats.

Ins 8.22(6) (6) "Principal" has the meaning given in s. 633.01 (5), Stats.

Ins 8.22 History History: Cr. Register, April, 1992, No. 436, eff. 5-1-92.

Ins 8.24 Ins 8.24 Exemptions.

Ins 8.24(1)(1) Each of the following is exempt from ch. 633, Stats., and this subchapter for the portion of its business subject to regulation under the specified sections:

Ins 8.24(1)(a) (a) An administrator of one or more self-insured, partially insured or divided insurance worker's compensation plans subject to s. DWD 80.60 or 80.61.

Ins 8.24(1)(b) (b) A warrantor or warranty plan administrator, as defined in s. Ins 15.01 (4) (c) or (e), that holds a valid certificate of authority under ch. Ins 15.

Ins 8.24(2) (2) An administrator that is partially exempt under sub. (1) (a) or (b) is subject to ch. 633, Stats., and this subchapter for any portion of its business that is outside the scope of the exemption.

Ins 8.24 History History: Cr. Register, April, 1992, No. 436, eff. 5-1-92; correction in (1) (a) made under s. 13.93 (2m) (b) 7., Stats., Register, June, 1997, No. 498.