2017 New Jersey Revised Statutes
TITLE 17B - INSURANCE
Section 17B:27C-7 - Liability of members.

17B:27C-7 Liability of members.

7. a. The liability of each member for the obligations of the self-funded multiple employer welfare arrangement shall be individual, several and proportionate, but not joint, except as provided in this section.

b. Each member shall have a contingent assessment liability pursuant to subsection c. of this section. Each benefit plan issued by a self-funded multiple employer welfare arrangement shall contain a statement of the contingent liability. Both the application for benefits and the benefit plan shall contain in contrasting color, not less than 10-point type, the following statement: "This is a fully assessable benefit plan. In the event that the self-funded multiple employer welfare arrangement is unable to pay its obligations, members shall be required to contribute on a pro rata earned premium basis the funds necessary to meet any unfilled obligations."

c. All self-funded multiple employer welfare arrangements shall provide that members are assessed in accordance with the provisions of this section. Each self-funded multiple employer welfare arrangement may assess all members if its prior fiscal year statement of operations reflected a loss. Each self-funded multiple employer welfare arrangement shall assess all members if the arrangement's fund balance or reserve at the end of any accounting period is less than the amount required by law. The minimum assessment shall be the amount necessary to comply with the requirements of sections 5 and 9 of this act. Each member's assessment shall be computed by applying the earned premium for each employer's benefit plan during the prior fiscal year as a percent of the amount of the total of all employers' earned premium for the same year. Each member's assessment shall be that member's percent times the total assessment levied. In the event a member fails to pay an assessment, the other members shall be liable on a proportionate basis for an additional assessment. The self-funded multiple employer welfare arrangement, acting on behalf of all members who paid the additional assessment, shall take appropriate legal action to recover the assessment from any member who fails to pay an assessment.

d. In the event of a rehabilitation, liquidation, conservation or dissolution of a self-funded multiple employer welfare arrangement, the court, pursuant to section 11 of this act, may assess the members in the amounts needed to pay all incurred but unpaid claims and all projected claims, together with the costs and expenses of collecting the assessments, a reasonable loading factor for uncollected assessments and the costs and expenses of the rehabilitation, liquidation, conservation or dissolution.

e. The following notice shall be provided to employers and employees who obtain coverage from a self-funded multiple employer welfare arrangement:

NOTICE

THE SELF-FUNDED MULTIPLE EMPLOYER WELFARE ARRANGEMENT IS NOT AN INSURANCE COMPANY AND DOES NOT PARTICIPATE IN ANY OF THE GUARANTEE FUNDS CREATED BY NEW JERSEY LAW. THESE FUNDS WILL NOT PAY YOUR CLAIMS OR PROTECT YOUR ASSETS IF A SELF-FUNDED MULTIPLE EMPLOYER WELFARE ARRANGEMENT BECOMES INSOLVENT AND IS UNABLE TO MAKE PAYMENTS AS PROMISED.

THE HEALTH CARE BENEFITS THAT YOU HAVE PURCHASED OR ARE APPLYING TO PURCHASE ARE BEING ISSUED BY A SELF-FUNDED MULTIPLE EMPLOYER WELFARE ARRANGEMENT. THE SELF-FUNDED MULTIPLE EMPLOYER WELFARE ARRANGEMENT IS REQUIRED TO MAINTAIN SUFFICIENT RESERVES TO PAY FOR ALL INCURRED LOSSES INCLUDING UNPAID CLAIMS.

IT IS IMPORTANT THAT YOU CHECK WITH YOUR EMPLOYER TO DETERMINE WHICH, IF ANY, STATE MANDATED HEALTH CARE BENEFITS MAY BE COVERED BY YOUR ARRANGEMENT.

FOR ADDITIONAL INFORMATION ABOUT THE MULTIPLE EMPLOYER WELFARE ARRANGEMENT YOU SHOULD ASK QUESTIONS OF YOUR TRUST ADMINISTRATOR AT _______________(this blank should include the "800" consumer service telephone number).

L.2001, c.352, s.7; amended 2015, c.172, s.4.

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