Fiscal Costs of Municipal Health Insurance

Administrative fee, broker fees, and municipal claims trust fund deficit.

Revised on 7/27/2017

The administrative cost for joining GIC coverage

As authorized by Section 19 and Section 23, the GIC charges an administrative fee of up to 1% of total premium per year.  This fee is determined by the GIC Commission each March as part of the fiscal year premium rates determination and is subject to change annually.  This fee pays for the GIC’s systems, operations, communications, customer service, and other services needed to accommodate and cover the Municipal Employers’ subscribers each year.

The administrative fee will be included in the Municipal Employers’ and their subscribers’ share of health premium

The law requires that the fee be included in their respective health premium rates.

Brokers’ fees are not factored into Municipal Employers’ and their subscribers’ premium contributions to GIC coverage

Since the GIC and its consultant will be performing the services that brokers perform, there will be no need for any brokers’ fees. The GIC prohibits the payment of any such fees.

What will happen if the city, town, or other political subdivision self-insures, and has a deficit in the claims trust fund at the time of transfer

If the deficit is attributable to a failure to accrue claims which had been incurred but not paid, the political subdivision may capitalize the deficit and amortize the amount over a period of not more than ten fiscal years. Only claims incurred on or after the date of transfer may be covered via the GIC. 


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