Chuuk State Health Care Plan
RegulationsChapter III
Trust Fund

Part 1.0          General Provisions

Part 1.1          Authority. These Regulations have been promulgated by the Chuuk State Health Care Plan, Board of Trustees for the establishment of the Plan's Trust Fund pursuant to section 6.1 of the Chuuk State Law No. 2-94-06 as amended. These regulations and any further amendments thereto shall  have the force and effects of law and be binding upon all persons  performing any specified trust fund functions.

Part 1.2          Purpose. The purpose of these regulations is for the Board of Trustees to establish a Trust Fund which shall be separated from the general fund or  other funds, and it shall be exclusively administered for the purpose of the  act.

Part 1.3.0      Appropriation for Medical Referral

Part 1.3.1       All moneys appropriated by the State Legislature or by any other entities intended for medical referral and/or related activities shall be deposited in the Plan Trust Fund.

Part 1.3.2       Any unexpended money in the Trust Fund shall not converted to the general fund or lapse at the end of the fiscal. year but shall remain in the Trust Fund and it shall be exclusively maintained for the purpose of the act and this regulation.

Part 1.3.3  Revenue
                   All revenues to the plan shall be deposited into the fund including:

            (a)    All assessment for universal coverage in accordance with the act,

            (b)    All premiums collected from employees and employers,

            (c)    All moneys received as subsidies to the plan from Chuuk State and National Governments or any other source of payments to the plan.

            (d)    All moneys from private sector health care providers collected pursuant to the act, and

            (e)    All fines, penalties and interest payment.
Part 1.3.4.      Payment of Benefits
All payments of benefits shall be paid from the Trust Fund including the following:

Part 1.3.5       (1)   Maximum Benefits
            (a)   The following maximum plan payments for off-island care apply whether the patient was referred, and include airfares and stipends.

            (b)   Airfares and stipends paid for a patient's companions or medical attendants are also charged against the patient's annual and lifetime maximums.

Maximum Per Year
Maximum Per Lifetime

            (c)    There is no maximum benefit for care received at the Chuuk State Hospital or a state dispensary, and the cost of care received on-island does not count towards the above maximums. However, the cost of care received at other FSM hospitals does.

Part 1.3.6       (2)   Deceased Patients
For referred patients only, CSHCP pays costs associated with the return of the remains of a patients who dies during such referral, to a maximum of $600.

Part 1.3.7       (3)   Emergency Care
            1.    For enrollees traveling or studying outside Chuuk, CSHCP pay 100% of off-island emergency care to a maximum of $1,000.

                        2.    An emergency means the sudden and unexpected onset of a severe medical condition which, if not treated immediately, would be, in the opinion of a physician, life-threatening or result in a permanent disability; e.g., a heart attack, severe hemorrhaging, poisoning, loss of consciousness orrespiration, broken bones, and convulsions are considered emergencies.

Part 1.3.8.     Financing of Premium
            1.    A medical security tax ( pursuant to section 8.10 of the State Law no. 2-94-06 as amended); is hereby imposed on the gross wages of all employed residents of the State of Chuuk which shall be payable by employers and employees in accordance with the following:

Chuuk State government
Chuuk State government employee
Private Sector Employer
Private Sector Employee

            2.    The employers shall pay the percentage of their employees' gross wages as specified in subpart (1) of this part.

            3.    Employees shall pay the percentage of their gross wages specified in subpart (1) of this part,

            4.    Notwithstanding subpart(2) and (3) of this part,
            5.    An employer may apply to the board for approval to pay a portion or all of its employee's shares of the medical security tax, and /or by written agreement filed with the plan to assume responsibility to pay more than one half of the premium amount.

Part 1.3.9       Liability for Premium Payments
            Government. The State Department of Treasury on behalf of the State and Municipal Governments shall collect the balance of the premium by deducting and withholding such amount from the enrollees compensation as well as the employer's share of the premium amount; and

Part 1.3.10      (2)   The State Treasury should make a by-weekly deposit into the Plan's Fund of such collection.

Part 1.3.11      (3)   Private Sector. Every employer require to deduct and withholding  their enrollee's premium amount as well as the employer's share of  the premium amount; and
Part 1.3.12     (4)   The employer shall pay on a by-weekly basis such premiums amount at the CSHCP's office, and

Part 1.3.13     (5)   The Executive Director should make daily deposit at the Bank of such amount.

Part 1.3.14    Penalties

Part 1.3.15     (1)   If any premium amount imposed by this regulation is not paid by an employer or enrollee on or before the date prescribed for such payments, there shall be collected, in addition to such premium amount and penalties, interest on the unpaid balance of the premium amount at the rate of 10 % (percent) per annum from its due date until the date it is paid;

Part 1.3.16     (2)   Any employer who has failed to make premium payments then required under this regulation shall be liable to the Plan for the reasonable costs incurred by the Plan and/or employee or covered dependent(s) for medical service required by the employees or covered dependent(s); provided, that such liability shall not exceed the costs of such services allowable under the Plan at the level for which the premium where to be made; and

Part 1.3.17     (3)   Any employer found to carry on any employment practice directly or indirectly designed to discourage or prevent employees from exercising the option to accept the first level of voluntary coverage shall be subject to penalty of not more than ten times the amount due to the CSHCP by the employer for each employee so affected by such practice receipts from the penalty shall first go to payment of the affected employee's premium payments. The remainder shall be deposited in the Trust Fund of the CSHCP as the realization of general revenue.
Part 1.3.18.    Remedies

Part 1.3.19.    (1)   The Board is authorized under Section 5.8 of the act to take civil  action and imposed liens, if necessary to collect overdue premiums  or any amount imposed or authorized under the act, and

Part 1.3.20     (2)   If any person liable to pay any amount under the act and neglect or refuse to pay the same after demand, the amount including any fine or interest assessed pursuant to Part 1.3.7 of this regulation,  together with any costs that may accrue in addition thereto shall be  a lien in favor of the Plan upon all property and rights to property, whether real or personal belonging to such person and maybe collected by levy upon such property in the same manner as the  levy of an execution.

Part 1.3.21.    Management of Trust Fund

Part 1.3.22.     (1)  The Executive Director shall manage and administer the fund in  accordance with the act and this regulation,

Part 1.3.23.     (2)   All moneys in the fund shall be held in Trust only for the purpose  of the act, and this regulation;

Part 1.3.24.     (3)   The Executive Director with the approval of the Board may from  time to time, invest such moneys in the fund as are in excess of the  amount deemed necessary for a reasonable future period.

Part 1.3.25.    (4)   The investment shall at all times be so made that all assets of the fund shall be easily convertible into cash when needed for the purpose of the act and this regulation.

Part 1.3.26.    (5)   Checks drawn against the fund would require two person's signatures, the Chairman of the Board and the CSHCP Executive Director or (in their absence the Vice Chairman and the Plan Administrative Officer. All new accounts shall be approved by the Board.

Part 1.3.27.     (6)  All premiums collected from all of the various sources mentioned  above shall be deposited into the fund.
Part 1.3.28.    Management Accountability and Control

Part 1.3.29.    (1)   The Board has established this management control system that would reasonably ensure:

                    (a)     obligation and costs comply with the State law and regulations

                    (b)     CSHCP's assets are safeguarded against fraud, waste misappropriation and unauthorized use.

                    (c)     Revenue and expenditures applicable to CSHCP operations are recorded and accounted for properly so that accountability of the assets is maintained. In particular the Board shall take all measures necessary to ensure that:

(1)       Its policies and procedures support the Health Care objectives of Chuuk State.

(2)       payments for benefits do not exceed revenues to the fund, and

(3)       only payments for benefits, which the Plan is obligated to provide, are made.

Part 1.3.30.    (2)   Integrity, Competence and Attitude.
CSHCP officers and employees must have personal integrity and are obligated to support the ethics program of the CSHCP standard of ethical conduct requires that they develop and implement effective management controls and maintain a level of competence that allow them to accomplish their works, and Effective communications within and between offices should be encouraged.

Part 1.3.31.    (3)   Delegation of Authority and Organization
The Executive Director should ensure that appropriate authority, responsibility and accountability are defined and delegated to accomplish mission of CSHCP, and that an appropriate organizational structure is established to effectively carry out program responsibilities to the extent possible controls, and related decisions making authority should be handled by line manager and staff.

Part 1.3.32.    (4)   Separation of Duties and Supervision
The Executive Director should ensure that key duties and responsibilities in authorizing, processing, recording and reviewing official CSHCP transactions should be separated among individuals. The Executive Director should exercise appropriate oversight to ensure individuals do not exceed their assigned authorities.

Part 1.3.33.    (5)   Recording and Documentation
Transactions should promptly recorded properly, classified and accounted for in order to prepare timely accounts and reliable financial and other reports. The documentation for transactions, management controls and other significant events must be clearly and readily available for examination.

Part 1.3.34.    (6)   Resolution of Audit Findings and other Deficiencies
The Executive Director should promptly evaluate and determine proper actions in response to known deficiencies, report audit and other findings, and related recommendations. The Executive Director or his/her designee should complete, within established time frames, all actions that correct or otherwise resolve the appropriate matters brought to the Board attention.

Part 1.3.35.   Record and Reporting

Part 1.3.36.    (1)   The Executive Director shall keep accurate records of CSHCP's business transactions. These records shall include, but not limited to, accounting of all income and expenditures assets and liabilities of the CSHCP.

Part 1.3.37.    (2)   The Executive Director shall prepare and submit to the Board a monthly report, which shall include the monthly financial report;

Part 1.3.38.    (3)   The Board, not later than 90 days after the close of each fiscal year, shall submit to the Governor and the Chuuk State Legislature, a complete report showing the activities of the CSHCP, and such other matters as the Board shall deem appropriate.

Part 1.3.39.    (4)   The personal records of the CSHSP shall be confidential.   No officer, employee or Board member of the CSHCP shall disclose any personal records obtain by him/her in any manner in connection with his/her service as such officer, employee or Board  member or otherwise.

Part 1.3.40.     (5)   For purposes of this sub-part, the term, "officer, employee, or  Board member" includes a former officer, employee or Board  member. "Personal records" means any records concerning any  individual enrollee or employer.

Part 1.3.41.    The Books of account of the CSHCP shall be audited by the Chuuk State Public Auditor annually.

Part 1.3.42.   Effective Date:
These regulations shall become effective upon the approval of the Governor of the State of Chuuk.

            Adopted by:                      /s/    
                                               Chairman, Board of Trustees
Date:     5-9-01

Approved by:                    /s/
                                                State of Chuuk
Date:     5/16/01