Local Government Self-Insurance Program (LGSI)

Guideline for Notification to State Risk Manager of Local Government Self-Insured Health and Welfare Program Changes

Adopted May 1998 by the State of Washington Health and Welfare Board

PURPOSE:

Identify those changes in the management or operations of local government self-insured health and welfare programs (program) to be communicated to and approved by the State Risk Manager (SRM) with the intent of assuring:

  • A common understanding of when and how such changes should be applied for and the approval process to be used by the State Risk Manager and;
  • That to the extent there is discretion in the notification or approval processes to be used, that discretion is applied uniformly and consistently to all programs.

Applicable State Statute
RCW 48.62.091 (5) provides that:

    No self-insurance program requiring the state risk manager’s approval may engage in an act or practice that in any respect significantly differs from the management and operation plan that formed the basis for the state risk manager’s approval of the program unless the program first notifies the state risk manager in writing and obtains the state risk manager’s approval. The state risk manager shall approve or disapprove the proposed change within sixty days of receipt of the notice. If the state risk manager denies a requested change, the risk manager shall specify in detail the reasons for the denial and the manner in which the program would fail to meet the requirements of this chapter or any rules adopted in accordance with this chapter.

Notification

Programs are responsible for notifying the SRM as set forth below whenever it is anticipated they will "...engage in an act or practice that in any respect differs significantly from the management and operation plan that formed the basis for the State Risk Manager’s approval of the program..."

The following is intended to identify those program changes that should be communicated and approved by the SRM. Changes in program management or operations not listed but which could reasonably be expected to result in program operations materially differing from that previously approved by the SRM should be communicated to the SRM as indicated below for "Changes requiring SRM approval".

Changes requiring SRM approval

Notify SRM but approval not required

Addition of a separate, local government entity to an existing approved, self-insured local government self-insured employee health benefits program.
Elimination of stop loss insurance.

Significant changes in program coverage (e.g. dental/vision program adding full medical coverage.)
Change in funding level of stop loss.

Change in consulting broker, actuary or TPA.
Changes in individual or aggregate stop loss insurance limits.

Changes in program coverage.

Self-insured program change to insured.

For "Changes Requiring SRM Approval" -- Written notification of the proposed change(s) is to be submitted to the SRM at least sixty (60) days prior to implementing anticipated change(s). The notification shall include all related documentation sufficient to determine the implications and the safety and soundness of the change(s) and shall include at least:

  • A complete description of the immediate and long term pool anticipated change(s)
  • Analysis of the impact(s) of the change(s) on program short and long term financial solvency and management;
  • Analysis of the effects of the change(s) on program’s short term operational work plans and the long term strategic plan;

For "Notify SRM But Approval Not Required" -- Change(s) should be in or with the annual report to SRM.

Approval Policy

RCW 48.62.011 provides that "...local government entities shall be grant(ed) maximum flexibility in self insuring to the extent the self-insurance programs are operated in a safe and sound manner."

Program changes requiring prior notice to the SRM will be reviewed and approved on the basis of whether the change(s) requested by the program would result in that program:

  • Not complying with the requirements of Chapter 48.62 R.C.W or any rules adopted in accordance with that chapter and/or;
  • Not operating in a safe and sound manner.
    The review, approval or denial by the SRM shall be completed and communicated in writing to the program within sixty (60) days the receipt of complete written notification.