ID S1185

Public employers may become self-insured for worker's compensation by applying to and obtaining approval from the industrial commission, subject to submission of an actuarial study (50% confidence level), self-insurance feasibility study, and business plan addressing excess insurance, claims administration, and loss control services.

Public employers applying for self-insured status must establish an internal service fund for receipt of contributions and payment of worker's compensation claims, managed according to commission rules.

Administrators and managers of public employer self-funded plans are prohibited from receiving fees or commissions beyond regular salary, serving as consultants while administering the plan, or having material pecuniary interests in plan loans or investments.

Upon finding a self-funded plan service fund depleted by wrongful or grossly negligent acts, the commission shall notify the attorney general who may recover the depleted amount for benefit of the plan.

Penalties for violations include administrative penalties up to $1,000 per individual or $5,000 per entity; false statements carry fines up to $15,000 and imprisonment up to 15 years; the act becomes effective immediately upon passage.