senate Bill S4526

Amended

Creates the freelancers health plan demonstration program

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 08 / Apr / 2013
    • REFERRED TO INSURANCE
  • 11 / Jun / 2013
    • AMEND (T) AND RECOMMIT TO INSURANCE
  • 11 / Jun / 2013
    • PRINT NUMBER 4526A
  • 12 / Jun / 2013
    • AMEND AND RECOMMIT TO INSURANCE
  • 12 / Jun / 2013
    • PRINT NUMBER 4526B
  • 20 / Jun / 2013
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 20 / Jun / 2013
    • ORDERED TO THIRD READING CAL.1559
  • 20 / Jun / 2013
    • SUBSTITUTED BY A6519B

Summary

Creates the freelancers health plan demonstration program; provides that such program would be a self-funded plan maintained by an association for the purpose of providing medical, surgical, or hospital services to independent workers; provides for an expiration of December 31, 2014.

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Bill Details

Versions:
S4526
S4526A
S4526B
Legislative Cycle:
2013-2014
Law Section:
Insurance Law
Laws Affected:
Add ยง1125, Ins L

Sponsor Memo

BILL NUMBER:S4526

TITLE OF BILL: An act to amend the insurance law, in relation to
creating the freelancers health plan demonstration program; and
providing for the repeal of such provision upon expiration thereof

Purpose Or General Idea Of Bill: The purpose of this bill is to allow
a Freelancers Union to self-fund its health insurance plan.

Summary Of Specific Provisions: This bill would allow a Freela ncers
Union to self-fund its health insurance plans (plan). Any plan
established under this bill would be required to offer the same
mandated benefits as a non-profit health insurer established pursuant
to article 43 of the Insurance Law, including the essential health
benefits mandated by the federal Affordable Care Act. Such plans would
also be required to maintain an eighty-two percent medical loss ratio.

In order to establish a plan, the Union would be required to obtain a
demonstration program waiver from the Superintendent of Financial
Services, establish and maintain a fair and equitable appeals process
subject to the laws relating to utilization review and external appeal
in article 49 of the Insurance Law, file all documents related to the
plan and certain financial reports with the Superintendent, and meet
minimum reserve requirements.

The bill would allow the Superintendent to conduct an examination into
a health plan pursuant to article 3 of the Insurance Law and the
Financial Services Law and the Superintendent could suspend or revoke
the waiver if the Superintendent finds that the Union has violated any
of the provisions of this bill. In addition, the bill would subject
the Union to the penalties established pursuant to section 109 of the
Insurance Law should the Union violate the provisions of this bill.

If a health insurance plan is to be terminated, the Union would be
required to submit to the Superintendent for approval a plan for
winding up the plan's affairs at least sixty clays prior to the
termination of the plan.

This bill would sunset on December 31, 2014.

Justification: Today, one-third of all working Americans are
temporary, part-time, freelance, or self-employed. These part-time,
temporary and independent workers frequently lack access to
employment-based group health insurance coverage and often cannot
afford to purchase coverage in the private pay market. In 2009, New
York State created a demonstration program that allowed the
Freelancers Union to provide health insurance solely to its members.
Currently, approximately 25,000 Union members and their dependents
receive affordable health insurance through the Union.

In 2010, President Obama signed the Affordable Care Act (ACA), a
landmark piece of legislation that increased access to and the quality
of health insurance in the United States. Effective January 1, 2014,
the ACA will require health insurers participating in the individual
and small group markets within a state to offer insurance to all
individuals or groups within that state. The ACA did not include an
exemption for unique health insurance programs such as the one offered


by the Freelancers Union. As a result, the Union will be required to
offer its health insurance plans on the open market. This will violate
the Union's commitment to its funders, reduce the Union's ability to
offer innovating plan designs that meet the unique needs of
freelancers living on modest incomes, and require the Union to
increase its reserve requirements, resulting in an increase in
premiums.

President Obama has stated that under the Affordable Care Act, those
who are happy with their health insurance will be able to keep it. By
self-funding its health insurance plan, the Freelancers Union will be
able to preserve its social mission of making quality, affordable,
portable coverage available to independent workers living on modest
incomes.

Prior Legislative History: New bill.

Fiscal Implications For State And Local Governments: None

Effective Date: Immediately and shall expire and be deemed repealed
on December 31, 2014.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4526

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              April 8, 2013
                               ___________

Introduced  by  Sens.  HANNON, SAVINO, BRESLIN -- read twice and ordered
  printed, and when printed to be committed to the Committee  on  Insur-
  ance

AN ACT to amend the insurance law, in relation to creating the freelanc-
  ers health plan demonstration program; and providing for the repeal of
  such provision upon expiration thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The insurance law is amended by adding a new  section  1125
to read as follows:
  S  1125.  FREELANCERS  HEALTH  PLAN  DEMONSTRATION  PROGRAM.   (A) FOR
PURPOSES OF THIS SECTION:
  (1) "FREELANCERS ASSOCIATION" MEANS AN ENTITY THAT: (A) IS EXEMPT FROM
FEDERAL TAXATION UNDER SECTION  501(C)(3)  OR  (C)(4)  OF  THE  INTERNAL
REVENUE CODE; AND (B) PRIOR TO JANUARY FIRST, TWO THOUSAND THIRTEEN, HAS
BEEN  ISSUED  ONE  OR MORE HEALTH INSURANCE POLICIES BY AN INSURER UNDER
SECTION ONE THOUSAND ONE HUNDRED TWENTY-THREE OF THIS ARTICLE.
  (2) "FREELANCERS HEALTH PLAN" OR "PLAN"    MEANS  A  SELF-FUNDED  PLAN
MAINTAINED  BY  A  FREELANCERS  ASSOCIATION FOR THE PURPOSE OF PROVIDING
MEDICAL, SURGICAL, OR HOSPITAL SERVICES TO INDEPENDENT WORKERS  WHO  ARE
MEMBERS  OF  THE FREELANCERS ASSOCIATION AND A MEMBER'S SPOUSE, DOMESTIC
PARTNER AND DEPENDENTS.
  (3) "INDEPENDENT WORKER" MEANS AN INDIVIDUAL WHO: (A) IS AN  INDEPEND-
ENT  CONTRACTOR;  (B) IS SELF-EMPLOYED; (C) WORKS PART-TIME; (D) OBTAINS
TEMPORARY WORK THROUGH AN EMPLOYMENT AGENCY; (E) PERFORMS TEMPORARY WORK
FOR TWO OR MORE EMPLOYERS SIMULTANEOUSLY; (F) IS A DOMESTIC  CHILD  CARE
WORKER;  OR  (G)  IS HIRED TO WORK FULL-TIME FOR A SINGLE EMPLOYER FOR A
PERIOD NOT TO EXCEED EIGHTEEN MONTHS IF SUCH  EMPLOYER  DOES  NOT  OFFER
GROUP  HEALTH  INSURANCE  TO EMPLOYEES EMPLOYED ON A TEMPORARY BASIS. AN
INDIVIDUAL IS NOT AN  INDEPENDENT  WORKER  IF  HE  OR  SHE  IS  EMPLOYED
FULL-TIME  BY A SINGLE EMPLOYER, WITH THE EXCEPTION OF AN INDIVIDUAL WHO

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10111-02-3

S. 4526                             2

MEETS THE REQUIREMENTS OF SUBPARAGRAPH (D), (F) OR  (G)  OF  THIS  PARA-
GRAPH.
  (4) "MEMBER CONTRACT" MEANS EVIDENCE OF COVERAGE FURNISHED TO AN INDE-
PENDENT  WORKER  WHO  IS A MEMBER OF A FREELANCERS ASSOCIATION THAT SETS
FORTH ALL BENEFITS AND TERMS AND CONDITIONS WITH REGARD TO A FREELANCERS
HEALTH PLAN.
  (5) "QUALIFIED ACTUARY" MEANS AN ACTUARY  WHO  IS  A  MEMBER  IN  GOOD
STANDING  OF  THE AMERICAN ACADEMY OF ACTUARIES OR SOCIETY OF ACTUARIES,
WITH EXPEDIENCE IN ESTABLISHING RATES FOR SELF-INSURED TRUSTS  PROVIDING
HEALTH BENEFITS OR OTHER SIMILAR EXPERIENCE.
  (B) A FREELANCERS ASSOCIATION SHALL NOT ESTABLISH, MAINTAIN, OR OTHER-
WISE  PARTICIPATE  IN  A  FREELANCERS HEALTH PLAN UNLESS THE FREELANCERS
ASSOCIATION OBTAINS AND MAINTAINS A DEMONSTRATION  PROGRAM  WAIVER  FROM
THE SUPERINTENDENT PURSUANT TO THE PROVISIONS OF THIS SECTION.
  (C)  EXCEPT  AS  OTHERWISE  PROVIDED  IN  THIS SECTION OR A REGULATION
PROMULGATED BY THE SUPERINTENDENT, A FREELANCERS ASSOCIATION OPERATING A
FREELANCERS HEALTH PLAN SHALL:
  (1) PROVIDE ALL MANDATED BENEFITS THAT  CORPORATIONS  ORGANIZED  UNDER
ARTICLE FORTY-THREE OF THIS CHAPTER ARE REQUIRED TO PROVIDE; AND
  (2) PROVIDE THAT ITS PLAN WILL HAVE AN EXPECTED LOSS RATIO OF NOT LESS
THAN  EIGHTY-TWO PERCENT. IN REVIEWING A RATE FILING OR APPLICATION BY A
PLAN, THE SUPERINTENDENT MAY  MODIFY  THE  EIGHTY-TWO  PERCENT  EXPECTED
MINIMUM  LOSS  RATIO  REQUIREMENT  IF  THE SUPERINTENDENT DETERMINES THE
MODIFICATION TO BE IN THE INTERESTS OF THE PEOPLE OF THIS  STATE  OR  IF
THE  SUPERINTENDENT DETERMINES THAT A MODIFICATION IS NECESSARY TO MAIN-
TAIN PLAN SOLVENCY. NO LATER THAN ONE  HUNDRED  TWENTY  DAYS  AFTER  THE
CLOSE  OF  A PLAN'S FISCAL YEAR, A PLAN SHALL ANNUALLY REPORT THE ACTUAL
LOSS RATIO FOR THE PREVIOUS PLAN FISCAL YEAR IN A FORMAT  ACCEPTABLE  TO
THE  SUPERINTENDENT.  IF  THE EXPECTED LOSS RATIO IS NOT MET, THE SUPER-
INTENDENT MAY DIRECT THE PLAN TO TAKE CORRECTIVE ACTION.
  (D) A FREELANCERS ASSOCIATION SHALL FILE AN APPLICATION FOR  A  DEMON-
STRATION   PROGRAM  WAIVER  ON  SUCH  FORM  AS  THE  SUPERINTENDENT  MAY
PRESCRIBE, AND SHALL PROVIDE TO THE SATISFACTION OF  THE  SUPERINTENDENT
THE FOLLOWING:
  (1)  A  COPY  OF THE MEMBER CONTRACT, INCLUDING A TABLE OF THE PREMIUM
RATES CHARGED OR PROPOSED TO BE CHARGED;
  (2) A REPORT INDICATING THE BENEFIT  PROVISIONS,  PREMIUM  RATES,  AND
INCURRED  MEDICAL  LOSSES  ASSOCIATED WITH THE FREELANCERS ASSOCIATION'S
MEMBERS UNDER THE INSURANCE POLICIES INSURING  THE  FREELANCERS  ASSOCI-
ATION'S   MEMBERS   PURSUANT   TO   SECTION  ONE  THOUSAND  ONE  HUNDRED
TWENTY-THREE OF THIS ARTICLE FOR THE THREE YEARS PRIOR TO  THE  DATE  OF
THE APPLICATION;
  (3)  THE  MOST RECENT CERTIFIED INDEPENDENTLY-AUDITED FINANCIAL STATE-
MENT FOR THE FREELANCERS ASSOCIATION;
  (4) A REPORT  PREPARED  BY  A  QUALIFIED  ACTUARY  THAT  SUPPORTS  THE
PROPOSED PREMIUMS FOR THE PLAN;
  (5)  A  COPY OF ALL AGREEMENTS BETWEEN THE FREELANCERS ASSOCIATION AND
ANY PLAN ADMINISTRATOR, WITH REGARD TO THE FREELANCERS HEALTH PLAN;
  (6) A PRO-FORMA BALANCE SHEET, INCLUDING ACTUARIALLY DETERMINED CLAIMS
LIABILITIES, AND STATEMENT OF REVENUE AND EXPENSES, INCLUDING REASONABLY
PROJECTED EXPENSES, MEDICAL  LOSSES,  AND  PREMIUMS  TO  BE  CHARGED  TO
MEMBERS OF THE PLAN DURING THE FIRST THREE YEARS;
  (7) A NARRATIVE DESCRIPTION OF THE:
  (A)  ACCOUNTING  METHODOLOGY  THAT  THE  FREELANCERS  ASSOCIATION WILL
UTILIZE, INCLUDING A DESCRIPTION OF THE SEPARATE ACCOUNTS  FOR  REVENUES
AND EXPENSES, INCLUDING MEDICAL AND HOSPITAL EXPENSES AND ADMINISTRATION

S. 4526                             3

EXPENSES,  RESERVES FOR CLAIMS AND EXPENSES THEREON, INCLUDING INCURRED-
BUT-NOT-REPORTED, UNEARNED PREMIUM RESERVES,  CONTINGENT  RESERVES,  AND
ANY  ASSET ACCOUNTS (CASH, PREMIUMS RECEIVABLE, INVESTMENTS) RELEVANT TO
THE PLAN. THE ACCOUNTS MAY BE ESTABLISHED WITHIN THE FREELANCERS ASSOCI-
ATION'S  GENERAL  ACCOUNTING  LEDGER SYSTEM, PROVIDED THE GENERAL LEDGER
ACCOUNTS ARE CLEARLY IDENTIFIABLE AS PERTAINING TO THE  PLAN,  INCLUDING
ANY SUCH ACCOUNTS ALLOCATED TO THE PLAN;
  (B)  BILLING  AND  CLAIM  PAYMENT  PROCEDURES, INCLUDING THE NAMES AND
CONTACT INFORMATION FOR THOSE PERSONS CHARGED WITH  HANDLING  ACCOUNTING
AND CLAIMS ISSUES; AND
  (C)  ANY  COMPENSATION  THE  FREELANCERS  ASSOCIATION  WILL RECEIVE IN
CONNECTION WITH THE PLAN.
  (8) A COPY OF ANY STOP-LOSS INSURANCE POLICY ISSUED OR PROPOSED TO  BE
ISSUED  BY  AN  INSURER  AUTHORIZED  TO  DO THE BUSINESS OF ACCIDENT AND
HEALTH INSURANCE IN THIS STATE OR IS A HEALTH SERVICE CORPORATION ORGAN-
IZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; AND
  (9) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  (E) UPON COMPLIANCE WITH THIS SECTION, THE SUPERINTENDENT SHALL  ISSUE
A DEMONSTRATION PROGRAM WAIVER TO AN APPLICANT. IF A FREELANCERS ASSOCI-
ATION  SUBMITS A MATERIALLY SATISFACTORY AND COMPLETE APPLICATION WITHIN
SIXTY DAYS OF THE EFFECTIVE DATE OF  THIS  SECTION,  THE  SUPERINTENDENT
SHALL  ISSUE  THE FREELANCERS ASSOCIATION A DEMONSTRATION PROGRAM WAIVER
THAT IS EFFECTIVE ON OR BEFORE JANUARY  FIRST,  TWO  THOUSAND  FOURTEEN.
EVERY  DEMONSTRATION PROGRAM WAIVER SHALL CONTAIN THE NAME OF THE CERTI-
FIED ENTITY AND ITS HOME OFFICE ADDRESS. THE SUPERINTENDENT SHALL REFUSE
TO GRANT A DEMONSTRATION PROGRAM WAIVER TO AN APPLICANT  THAT  FAILS  TO
MEET  THE  REQUIREMENTS  OF  THIS SECTION. NOTICE OF REFUSAL SHALL BE IN
WRITING AND SHALL  SET FORTH THE BASIS FOR  REFUSAL.  IF  THE  APPLICANT
SUBMITS A WRITTEN REQUEST WITHIN THIRTY DAYS AFTER RECEIPT OF THE NOTICE
OF  REFUSAL, THEN THE SUPERINTENDENT SHALL CONDUCT A HEARING TO GIVE THE
APPLICANT THE OPPORTUNITY TO SHOW CAUSE WHY THE REFUSAL  SHOULD  NOT  BE
MADE FINAL.
  (F)  IN ORDER TO OBTAIN AND MAINTAIN A DEMONSTRATION PROGRAM WAIVER, A
FREELANCERS ASSOCIATION SHALL:
  (1) FILE A COMPLETE APPLICATION WITH THE SUPERINTENDENT IN  ACCORDANCE
WITH SUBSECTION (D) OF THIS SECTION;
  (2)  HAVE WITHIN ITS OWN ORGANIZATION ADEQUATE RESOURCES AND COMPETENT
PERSONNEL TO ADMINISTER THE FREELANCERS HEALTH  PLAN  OR,  IN  ORDER  TO
PROVIDE  SUCH  ADMINISTRATIVE SERVICES, IN WHOLE OR PART, HAS CONTRACTED
WITH A PERSON OR ENTITY TO SERVE AS A PLAN ADMINISTRATOR, DETERMINED  BY
THE  FREELANCERS ASSOCIATION TO BE QUALIFIED BASED UPON WRITTEN DOCUMEN-
TATION FURNISHED TO  THE  FREELANCERS  ASSOCIATION,  PROVIDED  THAT  THE
DOCUMENTATION  SHALL  BE  MADE  AVAILABLE  TO  THE  SUPERINTENDENT  UPON
REQUEST;
  (3) ESTABLISH AND  MAINTAIN  PREMIUM  RATES  SUFFICIENT  TO  MEET  ITS
CONTRACTUAL  OBLIGATIONS  AND  TO  SATISFY  THE RESERVE REQUIREMENTS SET
FORTH IN SUBSECTION (H) OF THIS SECTION;
  (4) ESTABLISH AND MAINTAIN A FAIR AND  EQUITABLE  PROCESS  FOR  CLAIMS
REVIEW, DISPUTE RESOLUTION, AND APPEAL PROCEDURES, INCLUDING ARBITRATION
OF  REJECTED  CLAIMS, AND PROCEDURES FOR HANDLING CLAIMS FOR BENEFITS IN
THE EVENT OF PLAN DISSOLUTION, THAT ARE SATISFACTORY TO THE  SUPERINTEN-
DENT AND ARE SUBJECT TO ARTICLE FORTY-NINE OF THIS CHAPTER;
  (5) PROVIDE MEMBERS WITH A MEMBER CONTRACT; AND
  (6) FILE ALL PLAN DOCUMENTS AND ANY AMENDMENTS THERETO WITH THE SUPER-
INTENDENT  AND  RECEIVE THE SUPERINTENDENT'S APPROVAL IN ACCORDANCE WITH
THIS SECTION.

S. 4526                             4

  (G) A  FREELANCERS  ASSOCIATION  THAT  HAS  RECEIVED  A  DEMONSTRATION
PROGRAM  WAIVER  SHALL FILE WITH THE SUPERINTENDENT, FOR THE SUPERINTEN-
DENT'S PRIOR APPROVAL, ANY AMENDMENTS TO THE MEMBER CONTRACT,  FREELANC-
ERS HEALTH PLAN, OR PREMIUM RATES CHARGED FOR THE PLAN.
  (H)(1)  A  FREELANCERS  ASSOCIATION  SHALL ESTABLISH RESERVES WITH THE
AMOUNTS NECESSARY TO SATISFY ALL CONTRACTUAL OBLIGATIONS AND LIABILITIES
OF THE PLAN, INCLUDING: (A) A RESERVE FOR PAYMENT OF CLAIMS AND EXPENSES
THEREON REPORTED BUT NOT YET  PAID,  AND  CLAIMS  AND  EXPENSES  THEREON
INCURRED  BUT  NOT  YET REPORTED, WHICH SHALL NOT BE LESS THAN AN AMOUNT
EQUAL TO TWELVE AND ONE-HALF PERCENT OF  EXPECTED  INCURRED  CLAIMS  AND
EXPENSES  THEREON  FOR THE CURRENT PLAN YEAR, UNLESS A QUALIFIED ACTUARY
HAS DEMONSTRATED TO THE  SUPERINTENDENT'S  SATISFACTION  THAT  A  LESSER
AMOUNT  SHALL  BE  ADEQUATE;  (B)  A RESERVE FOR UNEARNED PREMIUM EQUIV-
ALENTS, COMPUTED PRO-RATA ON THE BASIS OF THE UNEXPIRED PORTION  OF  THE
POLICY  PERIOD; AND (C) A CONTINGENT RESERVE FUND, ESTABLISHED AND MAIN-
TAINED FOR THE SOLE PURPOSE OF SATISFYING UNEXPECTED OBLIGATIONS OF  THE
PLAN  IN  THE  EVENT  OF THE TERMINATION OF THE PLAN, WHICH SHALL NOT BE
LESS THAN FIVE PERCENT OF  THE  ANNUALIZED  EARNED  PREMIUM  EQUIVALENTS
DURING THE CURRENT FISCAL YEAR OF THE PLAN.
  (2)  A  QUALIFIED  ACTUARY  MAY  DEMONSTRATE THAT A LESSER AMOUNT OF A
RESERVE FOR PAYMENT OF CLAIMS AND EXPENSES THEREON REPORTED BUT NOT  YET
PAID,  AND  CLAIMS  AND  EXPENSES THEREON INCURRED-BUT-NOT-YET-REPORTED,
SHALL BE ADEQUATE  BY  SHOWING  THAT  THE  FREELANCERS  ASSOCIATION  HAS
OBTAINED  A  MEDICAL  STOP-LOSS  INSURANCE  POLICY  ISSUED BY AN INSURER
AUTHORIZED BY THE SUPERINTENDENT TO DO  THE  BUSINESS  OF  ACCIDENT  AND
HEALTH INSURANCE IN THIS STATE OR IS A HEALTH SERVICE CORPORATION ORGAN-
IZED  UNDER  ARTICLE  FORTY-THREE  OF  THIS  CHAPTER. IF AT ANY TIME THE
RESERVE FUNDS REQUIRED TO BE ESTABLISHED PURSUANT TO THIS  SECTION  FALL
BELOW  THE  REQUIRED  MINIMUM  AMOUNTS, THEN THE FREELANCERS ASSOCIATION
SHALL IMMEDIATELY NOTIFY THE  SUPERINTENDENT  OF  SUCH  IMPAIRMENT.  THE
FREELANCERS  ASSOCIATION  SHALL CURE THE IMPAIRMENT WITHIN FIVE BUSINESS
DAYS.
  (3) THE ASSETS CONSTITUTING THE FREELANCERS HEALTH  PLAN'S  CONTINGENT
RESERVE FUND SHALL CONSIST SOLELY OF CERTIFICATES OF DEPOSIT ISSUED BY A
UNITED STATES BANK AND PAYABLE IN UNITED STATES LEGAL TENDER, OR SECURI-
TIES  REPRESENTING INVESTMENTS OF THE TYPES SPECIFIED IN PARAGRAPHS ONE,
TWO, THREE, EIGHT, AND TEN OF SUBSECTION (A)  OF  SECTION  ONE  THOUSAND
FOUR  HUNDRED  FOUR OF THIS CHAPTER, OR AS OTHERWISE EXPRESSLY PERMITTED
BY THE SUPERINTENDENT. ANY INTEREST EARNED OR CAPITAL GAIN  REALIZED  ON
THE  MONEY  SO  DEPOSITED OR INVESTED SHALL ACCRUE TO AND BECOME PART OF
THE PLAN'S RESERVE FUNDS OR CONTINGENT RESERVE, AS APPLICABLE.
  (4) THE PLAN'S ASSETS,  LIABILITIES,  INCOME  AND  EXPENSES  SHALL  BE
ACCOUNTED  FOR  SEPARATE  AND  APART FROM ALL OTHER ASSETS, LIABILITIES,
INCOME AND EXPENSES OF THE FREELANCERS ASSOCIATION. THE  ACCOUNTING  FOR
THE  PLAN'S CONTINGENT RESERVE FUND SHALL SHOW: (A) THE PURPOSE, SOURCE,
DATE AND AMOUNT OF EACH SUM PAID INTO THE FUND; (B) THE INTEREST  EARNED
BY  SUCH  FUND;  (C)  CAPITAL GAINS OR LOSSES RESULTING FROM THE SALE OF
INVESTMENTS OF THE  PLAN'S  CONTINGENT  RESERVE  FUND;  (D)  THE  ORDER,
PURPOSE,  DATE  AND  AMOUNT  OF EACH PAYMENT FROM THE CONTINGENT RESERVE
FUND; AND (E) THE ASSETS OF THE CONTINGENT RESERVE FUND, INDICATING CASH
BALANCE AND SCHEDULE OF INVESTMENTS.
  (5) THE REQUIREMENTS FOR FUNDING  OF  THE  PLAN'S  RESERVES  SHALL  BE
CALCULATED  USING  GENERALLY  ACCEPTED ACCOUNTING PRINCIPLES. ONLY THOSE
EXPENSES THAT RELATE TO THE PLAN SHALL BE INCLUDED  IN  CALCULATING  THE
REQUIREMENTS FOR FUNDING OF THE PLAN'S RESERVE FUNDS. EXPENSES ALLOCATED
TO  THE PLAN SHALL BE ALLOCATED ON AN EQUITABLE BASIS IN CONFORMITY WITH

S. 4526                             5

GENERALLY  ACCEPTED  ACCOUNTING  PRINCIPLES  CONSISTENTLY  APPLIED.  THE
BOOKS,  ACCOUNTS,  AND  RECORDS  OF  THE  PLAN SHALL BE MAINTAINED AS TO
CLEARLY AND ACCURATELY DISCLOSE THE NATURE AND DETAILS OF  ALL  EXPENSES
SO AS TO SUPPORT THE REASONABLENESS OF SUCH EXPENSES.
  (I)  (1)  A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT
WITHIN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF THE PLAN'S FISCAL YEAR  A
REPORT THAT CONTAINS:
  (A)  AN  ANNUAL  FINANCIAL STATEMENT, VERIFIED BY THE OATH OF AT LEAST
TWO OF THE FREELANCERS ASSOCIATION'S  PRINCIPAL  OFFICERS,  WITH  DIRECT
KNOWLEDGE  OF THE OPERATIONS OF THE FREELANCERS HEALTH PLAN, SHOWING THE
FINANCIAL CONDITION OF THE PLAN DURING THE MOST RECENT FISCAL  YEAR,  IN
ACCORDANCE  WITH  LAW AND GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, IN A
FORM PRESCRIBED BY THE SUPERINTENDENT;
  (B) THE IDENTITY OF THE QUALIFIED ACTUARY UTILIZED BY THE  FREELANCERS
ASSOCIATION  OR PLAN AND THE AMOUNT PAID TO THE QUALIFIED ACTUARY BY THE
FREELANCERS ASSOCIATION OR PLAN DURING ITS MOST RECENT FISCAL YEAR;
  (C) THE IDENTITIES OF THE PLAN'S TEN LARGEST VENDORS BY PAYMENT AMOUNT
DURING ITS MOST RECENT FISCAL YEAR;
  (D) THE NAME AND CONTACT INFORMATION OF THE PERSON OR ENTITY APPOINTED
BY THE FREELANCERS ASSOCIATION  TO  ADMINISTER  THE  FREELANCERS  HEALTH
PLAN;
  (E) A PRO-FORMA STATEMENT OF PROJECTED REVENUE AND EXPENSES FOR HEALTH
BENEFITS ANTICIPATED BY THE PLAN FOR THE NEXT TWELVE-MONTH PERIOD OF THE
PLAN'S OPERATION, PROVIDED ON A FISCAL YEAR;
  (F)  A  DETAILED  REPORT OF THE OPERATIONS AND CONDITION OF THE PLAN'S
RESERVE FUNDS; AND
  (G) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  (2) A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT WITH-
IN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF ITS FREELANCERS HEALTH PLAN'S
FISCAL YEAR THE MOST RECENT CERTIFIED, INDEPENDENTLY  AUDITED  FINANCIAL
STATEMENT  FOR  THE FREELANCERS ASSOCIATION. THE STATEMENT SHALL INCLUDE
AN OPINION OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. THE  NOTES  TO
THE  FINANCIAL  STATEMENT  SHALL SHOW THE FINANCIAL RESULTS OF THE FREE-
LANCERS HEALTH PLAN OPERATIONS AND A DESCRIPTION AS TO HOW THE FREELANC-
ERS ASSOCIATION MEETS THE  RESERVE  REQUIREMENTS  IN  PARAGRAPH  ONE  OF
SUBSECTION  (H) OF THIS SECTION, INCLUDING THE AMOUNTS REPORTED FOR EACH
OF THE RESERVES, THE METHOD USED TO  CALCULATE  THE  RESERVES,  AND  THE
CHANGE  IN  THE RESERVES FROM THE BEGINNING OF THE PLAN'S FISCAL YEAR TO
THE END OF THE PLAN'S FISCAL YEAR. IN ADDITION, THE NOTES  TO  FINANCIAL
STATEMENT SHALL DETAIL THE ASSETS COMPRISING THE CONTINGENT RESERVE FUND
TO  DEMONSTRATE  COMPLIANCE WITH PARAGRAPH ONE OF SUBSECTION (H) OF THIS
SECTION.
  (3) A FREELANCERS ASSOCIATION THAT FAILS TO FILE ANY REPORT OR  STATE-
MENT REQUIRED BY THIS CHAPTER, OR FAILS TO REPLY WITHIN THIRTY DAYS TO A
WRITTEN  INQUIRY BY THE SUPERINTENDENT IN CONNECTION THEREWITH SHALL, IN
ADDITION TO OTHER PENALTIES PROVIDED BY THIS CHAPTER, BE  SUBJECT,  UPON
DUE  NOTICE AND OPPORTUNITY TO BE HEARD, TO A PENALTY OF UP TO ONE THOU-
SAND DOLLARS PER DAY  OF  DELAY,  NOT  TO  EXCEED  TWENTY-FIVE  THOUSAND
DOLLARS IN THE AGGREGATE, FOR EACH SUCH FAILURE.
  (J)  THE  SUPERINTENDENT MAY, PURSUANT TO SECTIONS THREE HUNDRED NINE,
THREE HUNDRED TEN, THREE HUNDRED ELEVEN, AND  THREE  HUNDRED  TWELVE  OF
THIS  CHAPTER, AND PURSUANT TO THE FINANCIAL SERVICES LAW, MAKE AN EXAM-
INATION INTO THE AFFAIRS OF ANY FREELANCERS ASSOCIATION WITH REGARD TO A
FREELANCERS HEALTH PLAN ISSUED BY THE FREELANCERS ASSOCIATION, AS  OFTEN
AS  THE  SUPERINTENDENT  DEEMS  IT  EXPEDIENT  FOR THE PROTECTION OF THE
INTERESTS OF THE PEOPLE OF THIS STATE.

S. 4526                             6

  (K)(1) THE  SUPERINTENDENT  MAY  SUSPEND  OR  REVOKE  A  DEMONSTRATION
PROGRAM WAIVER ISSUED TO A FREELANCERS ASSOCIATION IF THE SUPERINTENDENT
FINDS,  AFTER  NOTICE  AND HEARING, THAT THE FREELANCERS ASSOCIATION HAS
FAILED TO COMPLY WITH ANY REQUIREMENT IMPOSED ON IT BY THE PROVISIONS OF
THIS  CHAPTER AND IF IN THE SUPERINTENDENT'S JUDGMENT SUCH SUSPENSION OR
REVOCATION IS REASONABLY NECESSARY  TO  PROTECT  THE  INTERESTS  OF  THE
PEOPLE OF THIS STATE, INCLUDING:
  (A)  FOR  ANY  CAUSE  THAT  WOULD  BE A BASIS FOR DENIAL OF AN INITIAL
APPLICATION FOR A DEMONSTRATION PROGRAM WAIVER;
  (B) FAILURE TO MAINTAIN THE RESERVES REQUIRED  BY  SUBSECTION  (H)  OF
THIS SECTION; OR
  (C)  THE  SUPERINTENDENT  FINDS  THAT  THE FREELANCERS ASSOCIATION HAS
REFUSED TO PRODUCE ITS ACCOUNTS, RECORDS, AND FILES FOR  EXAMINATION  OR
HAS REFUSED TO COOPERATE OR GIVE INFORMATION WITH RESPECT TO THE AFFAIRS
OF  THE FREELANCERS HEALTH PLAN OR TO PERFORM ANY OTHER LEGAL OBLIGATION
RELATING TO SUCH AN EXAMINATION WHEN REQUIRED BY THE SUPERINTENDENT.
  (2) ANY DEMONSTRATION PROGRAM WAIVER SUSPENDED OR REVOKED  UNDER  THIS
SUBSECTION SHALL BE SURRENDERED TO THE SUPERINTENDENT, AND THE FREELANC-
ERS  ASSOCIATION  SHALL NOTIFY ALL MEMBERS OF THAT DECISION IN SUCH FORM
AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE, BUT NOT LATER  THAN  TEN
DAYS  AFTER RECEIPT OF NOTICE OF THE SUPERINTENDENT'S DECISION REQUIRING
SUSPENSION OR REVOCATION. IN ADDITION, THE FREELANCERS ASSOCIATION SHALL
SUBMIT A PLAN FOR THE  SUPERINTENDENT'S  APPROVAL  FOR  WINDING  UP  THE
PLAN'S AFFAIRS IN AN ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT
OF  ALL  BENEFITS,  IN  SUCH  FORM  AND MANNER AS THE SUPERINTENDENT MAY
PRESCRIBE.
  (3) NOTWITHSTANDING SUBDIVISION TWO OF  SECTION  EIGHTY-SEVEN  OF  THE
PUBLIC OFFICERS LAW, ALL FINAL DECISIONS TO SUSPEND OR REVOKE THE DEMON-
STRATION  PROGRAM  WAIVER WITH REGARD TO A FREELANCERS HEALTH PLAN SHALL
BE PUBLIC.
  (L) IN ANY CASE IN WHICH A  FREELANCERS  ASSOCIATION  DETERMINES  THAT
THERE  IS  A  REASON  TO  BELIEVE  THAT THE FREELANCERS HEALTH PLAN WILL
TERMINATE, THE FREELANCERS ASSOCIATION SHALL SO INFORM  THE  SUPERINTEN-
DENT AT LEAST SIXTY DAYS PRIOR THERETO, AND SHALL FILE A SWORN STATEMENT
WITH  THE  SUPERINTENDENT  CONCERNING ALL CURRENT AND FUTURE LIABILITIES
UNDER ITS DISCONTINUED PLAN. THE FREELANCERS ASSOCIATION SHALL SUBMIT  A
PLAN FOR THE SUPERINTENDENT'S APPROVAL FOR WINDING UP THE PLAN'S AFFAIRS
IN  AN  ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT OF ALL BENE-
FITS, IN SUCH FORM AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE.
  (M)(1) NO PART OF ANY FUNDS OF THE FREELANCERS  ASSOCIATION,  AS  THEY
PERTAIN  TO  THE FREELANCERS HEALTH PLAN, SHALL BE SUBJECT TO THE CLAIMS
OF GENERAL CREDITORS OF THE FREELANCERS ASSOCIATION UNTIL ALL PLAN BENE-
FITS AND OTHER PLAN OBLIGATIONS HAVE BEEN SATISFIED.  UNTIL  SUCH  TIME,
THE  FREELANCERS  ASSOCIATION  SHALL  CONTINUE  TO MAINTAIN AND FUND THE
RESERVE FUNDS REQUIRED TO BE ESTABLISHED UNDER SUBSECTION  (H)  OF  THIS
SECTION.  IF  AT  ANY TIME THE SUPERINTENDENT DETERMINES THAT ADDITIONAL
FUNDS SHALL BE DEPOSITED IN THE  RESERVE  FUNDS,  THEN  THE  FREELANCERS
ASSOCIATION SHALL MAKE THE DEPOSIT WITHIN THIRTY DAYS OF THE SUPERINTEN-
DENT'S DETERMINATION.
  (2)  IF,  AFTER  TWENTY-FOUR  MONTHS,  OR SUCH LONGER PERIOD AS DEEMED
NECESSARY BY THE SUPERINTENDENT, ALL PLAN BENEFITS AND OTHER PLAN  OBLI-
GATIONS  HAVE BEEN SATISFIED, THE FREELANCERS ASSOCIATION, UPON APPROVAL
BY THE SUPERINTENDENT, SHALL NO LONGER BE REQUIRED  TO  MAINTAIN  ASSETS
WITHIN  THE  PLAN'S  RESERVE FUNDS WITHIN RESTRICTED ACCOUNTS WITHIN THE
FREELANCERS ASSOCIATION'S GENERAL ACCOUNTING LEDGER SYSTEM.

S. 4526                             7

  (N) A FREELANCERS ASSOCIATION THAT RECEIVES  A  DEMONSTRATION  PROGRAM
WAIVER  UNDER  THIS  SECTION SHALL SUBMIT PERIODIC REPORTS TO THE SUPER-
INTENDENT SUFFICIENT TO ENABLE THE SUPERINTENDENT TO EVALUATE THE EFFEC-
TIVENESS OF THE DEMONSTRATION PROGRAM.   SUCH REPORTS  SHALL  INCLUDE  A
COMPARISON  OF  THE COST OF BENEFITS OBTAINED UNDER THE PROGRAM TO OTHER
AVAILABLE INSURANCE OPTIONS AND ANY OTHER INFORMATION  REQUIRED  BY  THE
SUPERINTENDENT.
  (O)  A  FREELANCERS  ASSOCIATION SHALL NOT ISSUE A STOP-LOSS INSURANCE
POLICY.
  (P) A FREELANCERS HEALTH PLAN SHALL PROVIDE BENEFITS ONLY TO INDEPEND-
ENT WORKERS WHO ARE MEMBERS OF THE  FREELANCERS  ASSOCIATION  SPONSORING
THE PLAN AND SUCH MEMBERS' SPOUSES, DOMESTIC PARTNERS AND DEPENDENTS.
  (Q)  THE  PROVISIONS  OF  THIS CHAPTER REQUIRING LICENSURE OF INSURERS
SHALL BE WAIVED WITH RESPECT TO  A  FREELANCERS  HEALTH  PLAN  OPERATING
UNDER  A DEMONSTRATION PROGRAM WAIVER. A FREELANCERS ASSOCIATION OPERAT-
ING FREELANCERS HEALTH PLAN PURSUANT TO A DEMONSTRATION  PROGRAM  WAIVER
SHALL  NOT  BE  DEEMED  TO  BE AN INSURER UNDER SECTION ONE THOUSAND ONE
HUNDRED ONE OF THIS ARTICLE AND SHALL NOT BE SUBJECT TO  THE  PROVISIONS
OF  THIS  CHAPTER  REGULATING  INSURERS EXCEPT AS EXPRESSLY SET FORTH IN
THIS SECTION.
  (R) THE SUPERINTENDENT MAY PROMULGATE SUCH REGULATIONS AS  THE  SUPER-
INTENDENT  DEEMS  NECESSARY  TO IMPLEMENT THE PROVISIONS OF THIS SECTION
AND TO ENSURE THAT THE PLANS ESTABLISHED UNDER THIS SECTION ARE  IN  THE
BEST  INTERESTS  OF  THE  FREELANCERS  ASSOCIATION'S  MEMBERS, AND THEIR
SPOUSES, DOMESTIC PARTNERS AND DEPENDENTS.
  (S) EXCEPT AS OTHERWISE PROVIDED  IN  THIS  SECTION,  ANY  FREELANCERS
ASSOCIATION THAT VIOLATES THIS SECTION SHALL BE SUBJECT TO THE PENALTIES
SET FORTH IN SECTION ONE HUNDRED NINE OF THIS CHAPTER.
  S  2.  This  act shall take effect immediately and shall expire and be
deemed repealed December 31, 2014.

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