Which option correctly describes the master certificate qualification after July 1, 1994?

• A. $2,220,000 net worth and $220,000 earnings in the past year
• B. $5,000,000 net worth and $500,000 earnings in the past year
• C. $5,000,000 net worth and average net income for the past five years of at least $500,000
• D. $7,500,000 net worth and $700,000 net income in the past year

Answer: (C)

Master certificate eligibility for a self-insured plan is about showing solid and sustained financial health to cover ongoing claims. Since July 1, 1994, the standard requires a net worth of $5,000,000 and an average net income over the past five years of at least $500,000. This five-year average ensures the plan demonstrates stable profitability rather than relying on a single strong year, signaling long-term solvency for a program that covers multiple employers. Other options either depend on a single year’s figures or use lower thresholds, which do not meet the established requirement. Therefore, the description of $5,000,000 net worth and a five-year average net income of at least $500,000 best fits the rule.