15 AAC 112.810 - Health reimbursement plan rate computation

(a) In accordance with AS 39.30.370, the plan administrator shall establish an individual account within the fund for each member of the plan, consisting of employer contributions on behalf of the member and interest applied annually as determined in this section.

(b) The plan administrator shall establish within the fund an expense and reinstatement reserve account. The expense and reinstatement reserve account shall be funded exclusively from earnings of the investments of the fund. No employer contributions made on behalf of employees may be deposited in the expense and reinstatement reserve account.

(c) Inflation adjustments to restore account balances as provided in AS 39.30.380 shall be funded out of the expense and reinstatement reserve account.

(d) All expenses of the plan shall be paid out of the expense and reinstatement reserve account, except to the extent expenses are paid from the state's general fund.

(e) No later than January 15 each year, the plan administrator shall (1) determine the earnings of the fund, reinstatement costs of the plan, and expenses of the plan for the prior fiscal year, and (2) transfer an amount from the earnings on investments in the fund in that prior fiscal year to the expense and reinstatement reserve account sufficient to bring the balance of the account equal to five times that fiscal year's expenses and reinstatement costs. Transfers to the expense and reinstatement reserve account may not exceed fund earnings of that fiscal year, and may not reduce individual account interest rates to a negative number.

(f) After required transfers to the expense and reinstatement reserve account, interest shall be calculated and applied annually to the member's individual account. The amount of interest applied is not guaranteed and may change upward or downward significantly from year to year based upon the calculation under (g) and (h) of this section, and may be negative so long as the amount results from investment losses.

(g) Interest for a fiscal year will be credited to a member's individual account no later than January 15 of the following year. Interest shall be applied at a rate determined by the plan administrator by

(1) calculating the amount of earnings or losses remaining after the expense and reinstatement reserve account transfer in (e) of this section;

(2) making adjustments as might be required based upon

(A) reports by the plan administrator, the state comptroller, or chief investment officer which may impact the value of the fund; and

(B) any other information, which, in the opinion of the plan administrator, the state comptroller, or chief investment officer, would be useful in determining the full and true value of the fund and accounts; and

(3) dividing the remaining earnings or losses by the sum of individual accounts eligible for interest at the end of the fiscal year.

(h) The interest determined under (g) of this section for a particular fiscal year shall be applied to an eligible member's individual account balance as of June 30 of that fiscal year.

(i) Notwithstanding (e), (f), (g), and (h) of this section, for state fiscal years 2007, 2008, 2009, and 2010, annual interest for each eligible member's individual account shall be the lesser of (1) one percent of the member's individual account balance as of June 30 of the fiscal year or (2) earnings (before transfers to the expense and reimbursement reserve account) on investments in the fund apportionable to the member's individual account as of June 30 of the fiscal year.

(j) Unless the context otherwise requires, the terms used in this section are as defined in AS 39.30.495.

Notes

15 AAC 112.810

Eff. 5/26/2007, Register 186

Even though the adoption of 15 AAC 112.810 was effective 5/26/2007, it was not published until Register 186, July 2008.

Authority:AS 37.10.220(a)(6)

AS 37.10.240