CurrentOffice of the Montana State Auditor, Commissioner of Securities and InsurancePolicy 2026-109.2

Statewide District Health Trust requirements

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This notice adopts four new Montana rules governing statewide district health trusts, including reserve levels, annual financial reporting, and other reporting obligations. The requirements apply to participating school districts and the Office of the State Auditor.

Policy Summary

PayerOffice of the Montana State Auditor, Commissioner of Securities and Insurance

PolicyStatewide District Health Trust requirements

Policy CodePolicy 2026-109.2

Change TypeNew rules adopted

Effective DateJuly 25, 2026

Next Review DateN/A

Key ActionFile an annual NAIC health blank financial statement with all required schedules by September 1.

SourceLink

POLICY UPDATE CHANGES

Four new rules were adopted governing definitions, minimum reserves, annual financial reporting, and other reporting requirements for statewide district health trusts.

The claim-reserve requirement was revised to require use of a 90% confidence level and the actuary's memorandum prepared under applicable actuarial standards and NAIC health annual statement instructions.

The deadline for notifying the state auditor after a school district signs a binding agreement to join the trust was extended from 15 days to 30 days.

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CurrentOffice of the Montana State Auditor, Commissioner of Securities and InsurancePolicy 2026-109.2

Statewide District Health Trust requirements

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Policy Summary

PayerOffice of the Montana State Auditor, Commissioner of Securities and Insurance

PolicyStatewide District Health Trust requirements

Policy CodePolicy 2026-109.2

Change TypeNew rules adopted

Effective DateJuly 25, 2026

Next Review DateN/A

Key ActionFile an annual NAIC health blank financial statement with all required schedules by September 1.

SourceLink

POLICY UPDATE CHANGES

Four new rules were adopted governing definitions, minimum reserves, annual financial reporting, and other reporting requirements for statewide district health trusts.

The deadline for notifying the state auditor after a school district signs a binding agreement to join the trust was extended from 15 days to 30 days.

90%claim-reserve confidence level

September 1annual financial statement deadline

December 1audited financial statement deadline

30 daysnew district agreement reporting deadline

120 daysadvance notice before dissolution vote

Statewide District Health Trust Requirements

Statewide District Health Trust Compliance Requirements

The statewide district health trust must satisfy <strong>all</strong> of the following reserve, financial-reporting, actuarial, certification, and notification requirements.

ALL requirements

Minimum reserves
- Maintain reserves in an amount necessary to satisfy the minimum risk-based capital recommended by the trust's actuary.
  New Rule 2 (6.6.9103)(1).
- Maintain claim reserves using a 90% confidence level and in accordance with the actuary's actuarial memorandum prepared under applicable actuarial standards of practice and NAIC annual statement instructions for health annual statement filings.90% confidence level
  The reserve determination is based at the midpoint of the estimate determined by the actuary using the 90% confidence interval specified in 20-3-366(2)(j) and 20-3-370(3)(b), MCA.
- Provide additional information reasonably necessary for the state auditor to evaluate claim-reserve and plan-reserve adequacy when required.
  The state auditor may obtain an independent actuarial review of the trust's minimum reserve level; the trust must bear the cost of that review.
Annual financial statement filing
- Beginning the year following adoption of the rule, file with the state auditor, on or before September 1 of each year, an annual financial statement on the NAIC health blank form, including all required schedules and covering the prior fiscal year.On or before September 1 annually
- Include a confidential risk-based capital calculation using the NAIC-prescribed risk-based capital form.
- Include a statement of actuarial opinion from the trust's credentialed actuary attesting to the adequacy of unpaid claims liability and related year-end reserves, using generally accepted actuarial principles and stating the required 90% confidence level under 20-3-370(3)(b), MCA.90% confidence level
- Include the most recent calculation of minimum reserves under New Rule 2 (6.6.9103).
  A confidential actuarial opinion summary and reserve report satisfies this requirement.
Additional annual and plan-year reporting
- File audited financial statements certified by an independent certified public accountant with the state auditor on or before December 1 of each year.On or before December 1 annually
  The trust may use GAAP or SAP. After electing a basis of accounting, any future change requires state auditor approval.
- For each plan year beginning after the trust has provided health benefits to members for two full years, provide the state auditor with a copy of the report provided to each participating district and employee group under 20-3-367(2)(a), MCA.On or before January 1 of each applicable plan year
- Beginning July 1, 2036, as part of the annual actuarial analysis, indicate any excess reserves held by the trust and the total amount the trust has repaid to the state.Beginning July 1, 2036
District joining and withdrawal notifications
- Notify the state auditor in writing after a school district signs a binding agreement to join the trust.Within 30 days
  Include the documents signed by the school district and the district's most recent employee census information.
- Notify the state auditor in writing after receiving notice from a school district that it intends to withdraw from the trust.Within 15 days
  Include the district name; number of employees contracted to participate in and obtain health insurance through the trust; all communications from the district concerning withdrawal; the trust's statement regarding whether it agrees the district may withdraw; and the reimbursement amount due to the trust under 20-3-367(3)(c), MCA.
Voluntary dissolution notification
- Notify the state auditor in writing before the trust intends to hold a vote to voluntarily dissolve under 20-3-368(1), MCA.At least 120 days before the vote

Trust Compliance Actions and Deadlines

Documentation Required

Maintain minimum reserves

Maintain reserves in an amount necessary to satisfy the minimum risk-based capital recommended by the trust’s actuary.

Documentation Required

Maintain claim reserves

Maintain claim reserves using a 90% confidence level and in accordance with the actuary’s actuarial memorandum prepared under actuarial standards of practice and NAIC health annual statement instructions.

Documentation Required

Support reserve adequacy review

When requested, provide additional information reasonably necessary for the state auditor to evaluate claim-reserve and plan-reserve adequacy. The trust bears the cost of any independent actuarial review obtained by the state auditor.

Reserve Terminology

Reserve, reserves, or plan reserves

Defined forPurposes of 20-3-366, MCA

MeaningCapital and surplus

CalculationTotal assets minus total liabilities

Not limited toClaim reserves or premium deficiency reserves

Policy Summary

PayerOffice of the Montana State Auditor, Commissioner of Securities and Insurance

PolicyStatewide District Health Trust requirements

Policy CodePolicy 2026-109.2

Change TypeNew rules adopted

Effective DateJuly 25, 2026

Next Review DateN/A

Key ActionFile an annual NAIC health blank financial statement with all required schedules by September 1.

SourceLink

On This Page

Include a list of school districts participating during the prior year and, for each district, the number of employees contracted to participate in and obtain health insurance through the trust.

Submit a certification signed by the trust under oath stating that the other criteria in 20-3-366, MCA, were satisfied during the prior year, are satisfied as of the certification date, and are not known to be subject to material changes that will affect the trust's ability to satisfy them going forward.

Documentation Required

Submit annual financial reporting

On or before September 1 of each year, file an annual financial statement with the state auditor on the NAIC health blank form, complete with all required schedules, covering the prior fiscal year.

Confidential risk-based capital calculation using the NAIC’s prescribed risk-based capital form.
Statement of actuarial opinion from the trust’s credentialed actuary addressing unpaid claims liability and related reserves at year-end, using generally accepted actuarial principles and a 90% confidence level.
Most recent minimum-reserve calculation; a confidential actuarial opinion summary and reserve report satisfies this requirement.
List of participating school districts during the prior year and the number of participating employees for each district.
Oath-based certification that the statutory criteria were satisfied during the prior year, remain satisfied as of certification, and are not expected to be materially affected going forward.

Documentation Required

File audited financial statements

On or before December 1 of each year, file audited financial statements certified by an independent certified public accountant. The statements may use GAAP or SAP; once selected, any change in accounting basis requires state auditor approval.

Use either generally accepted accounting principles (GAAP) or statutory accounting principles (SAP).
Obtain state auditor approval before changing the selected accounting basis.

Documentation Required

Submit participating-group reports

On or before January 1 of each applicable plan year beginning after the trust has provided health benefits to its members for more than two full years, provide the state auditor a copy of the report supplied to each participating district and employee group.

Documentation Required

Report excess reserves and repayments

Beginning July 1, 2036, include in the annual actuarial analysis the excess reserves existing in the trust and the total amount the trust has repaid to the state.

Documentation Required

Report new participating districts

Notify the state auditor in writing within 30 days after a school district signs a binding agreement to join the trust.

Include the documents signed by the school district.
Include the school district’s most recent employee census information.

Documentation Required

Report district withdrawals

Notify the state auditor in writing within 15 days after receiving notice that a school district intends to withdraw from the trust.

Name of the school district and number of employees contracted to participate in and obtain health insurance through the trust.
All communications from the school district concerning withdrawal.
The trust’s statement on whether it agrees that the district may withdraw.
The amount of reimbursement due to the trust under 20-3-367(3)(c), MCA.

Documentation Required

Report planned dissolution vote

Notify the state auditor in writing at least 120 days before the trust intends to hold a vote to voluntarily dissolve under 20-3-368(1), MCA.