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DPW Releases Draft Bulletin on Self Insurance Programs
May 9, 2006

The Bureau of Administrative Services of the Department of Public Welfare (DPW) recently released a draft Administrative Bulletin entitled Self Insurance Programs. The expressed intent of the bulletin is to "provide guidance in the area of self insurance for providers of MH/MR services funded through the counties."

The bulletin attempts to clarify the allowable costs of self insurance under the Chapter 4300 regulations. Utilizing the principle that reimbursement must be based on cost, the bulletin lists a variety of allowable costs. The bulletin concludes that excess earnings, rebates, or dividends that might accrue from utilizing self insurance must be utilized to reduce the costs to counties.

The bulletin further attempts to define allowable methods for developing a reserve fund often required in self insurance programs. Upon initial examination, the bulletin does not deal directly with the issue of "pooled trusts" as seen with the PCPA Worker’s Compensation Self Insurance Trust.

PCPA is engaging in further review of the bulletin. Comments are expected within 30 days. PCPA requests the following actions of interested members:

1. Please review the attached cover letter and draft bulletin. This is critical for agencies currently utilizing self insurance.

2. Please provide comments on the draft bulletin to George Kimes by May 22. Comments may also be made directly to the DPW at the address indicated on the cover letter.

3. PCPA members that currently utilize self insurance and interested in participating in an association work group on this issue should please contact Mr. Kimes as soon as possible. The association would like to have at least one conference call prior to the deadline for submission of comments.

For additional information and/or questions please contact George Kimes.

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