NY State Senate Bill 2015-S6694

Senate Bill S6694

Signed By Governor

2015-2016 Legislative Session

Relates to catastrophic or reinsurance coverage issued to certain small groups; repealer

download bill text pdf

Archive: Last Bill Status - Signed by Governor

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 11, 2016	signed chap.12
Mar 04, 2016	delivered to governor
Mar 01, 2016	returned to senate passed assembly ordered to third reading cal.409 substituted for a9248
Feb 24, 2016	referred to insurance delivered to assembly passed senate
Feb 08, 2016	ordered to third reading cal.146
Feb 05, 2016	referred to rules

Votes

- Feb 24, 2016 - Floor Vote
  S6694
  
  59
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  3
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Feb 24, 2016
      
      aye (59)
      
      Addabbo Jr.
      
      Akshar
      
      Amedore
      
      Avella
      
      Bonacic
      
      Boyle
      
      Breslin
      
      Carlucci
      
      Comrie
      
      Croci
      
      DeFrancisco
      
      Dilan
      
      Espaillat
      
      Farley
      
      Felder
      
      Flanagan
      
      Funke
      
      Gallivan
      
      Gianaris
      
      Golden
      
      Griffo
      
      Hamilton
      
      Hannon
      
      Hoylman-Sigal
      
      Kennedy
      
      Krueger
      
      LaValle
      
      Lanza
      
      Larkin
      
      Latimer
      
      Little
      
      Marcellino
      
      Marchione
      
      Martins
      
      Montgomery
      
      Murphy
      
      Nozzolio
      
      O'Mara
      
      Ortt
      
      Panepinto
      
      Parker
      
      Peralta
      
      Perkins
      
      Persaud
      
      Ranzenhofer
      
      Ritchie
      
      Rivera
      
      Robach
      
      Sanders Jr.
      
      Savino
      
      Serino
      
      Serrano
      
      Seward
      
      Squadron
      
      Stavisky
      
      Stewart-Cousins
      
      Valesky
      
      Venditto
      
      Young
      
      excused (3)
      
      Diaz
      
      Hassell-Thompson
      
      Klein
  Feb 8, 2016 - Rules Committee Vote
  S6694
  
  23
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  2
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: Feb 8, 2016
      
      aye (23)
      
      Bonacic
      
      Breslin
      
      Carlucci
      
      DeFrancisco
      
      Dilan
      
      Espaillat
      
      Farley
      
      Flanagan
      
      Gianaris
      
      Hannon
      
      Hassell-Thompson
      
      Krueger
      
      LaValle
      
      Lanza
      
      Larkin
      
      Little
      
      Marcellino
      
      Montgomery
      
      Nozzolio
      
      Robach
      
      Seward
      
      Stewart-Cousins
      
      Valesky
      
      excused (2)
      
      Parker
      
      Perkins

2015-S6694 (ACTIVE) - Details

See Assembly Version of this Bill:: A9248
Law Section:: Insurance Law
Laws Affected:: Amd §§3231 & 4317, Ins L; amd §5, rpld §4, Chap of 2015 (as proposed in S.6004 & A.8300)

2015-S6694 (ACTIVE) - Summary

Relates to catastrophic or reinsurance coverage issued to certain small groups.

2015-S6694 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S6694

 TITLE OF BILL :

An act to amend the insurance law, in relation to catastrophic or
reinsurance coverage issued to certain small groups; to amend a
chapter of the laws of 2015 amending the insurance law relating to
catastrophic or reinsurance coverage issued to certain small groups,
as proposed in legislative bills numbers S. 6004 and A.  8300, in
relation to the effectiveness of such chapter; and in relation to
directing the superintendent of financial services to contract with an
independent entity to conduct an assessment regarding the impact of
the prohibition on the sale of stop loss, catastrophic and reinsurance
coverage to the small group market; to amend a chapter of the laws of
2015 amending the insurance law relating to catastrophic or
reinsurance coverage issued to certain small groups, as proposed in
legislative bills numbers S.5928-A and A.8134-A, in relation to the
effectiveness of such chapter; and to repeal section 4 of a chapter of
the laws of 2015 amending the insurance law relating to catastrophic
or reinsurance coverage issued to certain small groups, as proposed in
legislative bills numbers S. 6004 and A. 8300, relating thereto

 PURPOSE :

The purpose of this bill is to amend chapters of the laws of 2015
related to the sale of stop-loss, catastrophic and reinsurance

coverage to certain employers within the small-group health insurance
market.

 SUMMARY OF PROVISIONS :

This bill would provide that stop-loss, catastrophic and reinsurance
coverage may only be sold in the small group health market to groups
with 51 to 100 workers which already had policies as of January 1st,
2015. The bill would sunset the exemption for these groups in three
years. Additionally, the bill would require the Department of
Financial Services to contract with an independent entity to study the
effects of the sale of stop-loss, catastrophic and reinsurance
coverage on the small group market.  Stop-loss carriers are
responsible for the costs of the contract entered with the independent
entity to cover the report. The report is due to the Legislature on or
before March 1, 2018.

 JUSTIFICATION :

The ACA expanded the "small group" market from 2-50 to 2-100 employees
or members effective January 1st, 2016 in order to place downward
pressure on premiums through the law of large numbers by including
larger firms within the group. Expanding the small group up to 100
members or employees required the sale of community-rated policies-and
prohibited the sale of stop loss, reinsurance or catastrophic
coverages-to groups with between 51-100 members or employees for the
first time. This included both private sector firms and members of
municipal cooperatives and schools which are members of municipal
cooperative associations pursuant to article five-G of the general
municipal law.

Chapters 588 and 589 of 2015 grandfathered 51-100 member groups which
had self-insurance with stop-loss coverage as of June 1st, 2015, as
long as they kept their coverage in effect.

This bill amends the Chapters to provide self-insured groups the
flexibility to select a different stop loss carrier and/or plan once
in 2016 upon replacement of such coverage. Thereafter, groups may
continue to self-insure through renewal with the same stop loss
carrier. This bill also extends the sunset to three years.
 LEGISLATIVE HISTORY :

New Bill.

 FISCAL IMPLICATIONS :

Undetermined.

 EFFECTIVE DATE :
Immediately, provided, however, that sections one, two, three, four,
five and seven of this act shall be deemed to have been in full force
and effect on the same date and in the same manner as chapter 588 of
the laws of 2015 took effect; provided further that the amendments to
sections 3231 and 4317 of the insurance law made by sections one, two,
three and four of this act shall not affect the expiration of such
provisions and shall be deemed expired therewith.

2015-S6694 (ACTIVE) - Bill Text download pdf

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

                                  6694

                            I N  S E N A T E

                            February 5, 2016
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

AN ACT to amend the insurance law, in relation to catastrophic or  rein-
  surance coverage issued to certain small groups; to amend a chapter of
  the  laws  of 2015 amending the insurance law relating to catastrophic
  or reinsurance coverage issued to certain small groups, as proposed in
  legislative bills numbers S. 6004 and A.   8300, in  relation  to  the
  effectiveness of such chapter; and in relation to directing the super-
  intendent of financial services to contract with an independent entity
  to  conduct  an  assessment regarding the impact of the prohibition on
  the sale of stop loss, catastrophic and reinsurance  coverage  to  the
  small  group  market;  to amend a chapter of the laws of 2015 amending
  the insurance law relating to  catastrophic  or  reinsurance  coverage
  issued  to  certain  small  groups,  as  proposed in legislative bills
  numbers S.5928-A and A.8134-A, in relation  to  the  effectiveness  of
  such chapter; and to repeal section 4 of a chapter of the laws of 2015
  amending  the  insurance  law  relating to catastrophic or reinsurance
  coverage issued to certain small groups, as  proposed  in  legislative
  bills numbers S. 6004 and A. 8300, relating thereto

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

  Section 1. Paragraph 1 of subsection (h) of section 3231 of the insur-
ance law, as amended by a chapter of  the  laws  of  2015  amending  the
insurance law relating to catastrophic or reinsurance coverage issued to
certain  small  groups,  as proposed in legislative bills numbers S.6004
and A.8300, is amended to read as follows:
  (1) Notwithstanding any other provision of this chapter,  no  insurer,
subsidiary  of  an  insurer,  or  controlled person of a holding company
system may act as an administrator or claims paying agent, as opposed to
an insurer, on behalf of small groups which, if  they  purchased  insur-
ance,  would  be  subject to this section. No insurer[, subsidiary of an
insurer, or controlled person of a holding  company]  may  provide  stop
loss,  catastrophic  or  reinsurance  coverage to small groups which, if
they purchased insurance, would be subject to this section.    Provided,

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

                                                           LBD11569-16-6

S. 6694                             2

however,  the  provisions  of this paragraph shall not apply to: (A) THE
RENEWAL OF stop loss, catastrophic or reinsurance coverage issued and in
effect on [or before] January  first,  two  thousand  fifteen  to  small
groups  covering  between fifty-one and one hundred employees or members
of the group; AND (B) THE ISSUANCE BETWEEN JANUARY FIRST,  TWO  THOUSAND
SIXTEEN  AND  DECEMBER THIRTY-FIRST, TWO THOUSAND SIXTEEN, OF STOP LOSS,
CATASTROPHIC OR REINSURANCE COVERAGE, AND  ANY  RENEWAL  THEREOF,  TO  A
SMALL  GROUP  COVERING  BETWEEN  FIFTY-ONE  AND ONE HUNDRED EMPLOYEES OR
MEMBERS  OF  THE  GROUP,  PROVIDED  THAT  SUCH  GROUP  HAD  STOP   LOSS,
CATASTROPHIC  OR  REINSURANCE  COVERAGE  ISSUED AND IN EFFECT ON JANUARY
FIRST, TWO THOUSAND FIFTEEN.
  S 2. Paragraph 1 of subsection (e) of section 4317  of  the  insurance
law,  as amended by a chapter of the laws of 2015 amending the insurance
law relating to catastrophic or reinsurance coverage issued  to  certain
small  groups,  as  proposed  in  legislative  bills  numbers S.6004 and
A.8300, is amended to read as follows:
  (1) Notwithstanding any other provision of this chapter,  no  insurer,
subsidiary  of  an  insurer,  or  controlled person of a holding company
system may act as an administrator or claims paying agent, as opposed to
an insurer, on behalf of small groups which, if  they  purchased  insur-
ance,  would  be  subject to this section. No insurer[, subsidiary of an
insurer, or controlled person of a holding  company]  may  provide  stop
loss,  catastrophic  or  reinsurance  coverage to small groups which, if
they purchased insurance, would be subject to  this  section.  Provided,
however,  the  provisions  of this paragraph shall not apply to: (A) THE
RENEWAL OF stop loss, catastrophic or reinsurance coverage issued and in
effect on [or before] January  first,  two  thousand  fifteen  to  small
groups  covering  between fifty-one and one hundred employees or members
of the group; AND (B) THE ISSUANCE BETWEEN JANUARY FIRST,  TWO  THOUSAND
SIXTEEN,  AND DECEMBER THIRTY-FIRST, TWO THOUSAND SIXTEEN, OF STOP LOSS,
CATASTROPHIC OR REINSURANCE COVERAGE, AND  ANY  RENEWAL  THEREOF,  TO  A
SMALL  GROUP  COVERING  BETWEEN  FIFTY-ONE  AND ONE HUNDRED EMPLOYEES OR
MEMBERS  OF  THE  GROUP,  PROVIDED  THAT  SUCH  GROUP  HAD  STOP   LOSS,
CATASTROPHIC  OR  REINSURANCE  COVERAGE  ISSUED AND IN EFFECT ON JANUARY
FIRST, TWO THOUSAND FIFTEEN.
  S 3. Paragraph 1 of subsection (g) of section 3231  of  the  insurance
law,  as amended by a chapter of the laws of 2015 amending the insurance
law relating to catastrophic or reinsurance coverage issued  to  certain
small  groups,  as  proposed  in  legislative bills numbers S.5928-A and
A.8134-A, is amended to read as follows:
  (1) (A) This section shall also apply to policies issued  to  a  group
defined  in  subsection (c) of section four thousand two hundred thirty-
five of this chapter, including but not limited  to  an  association  or
trust  of  employers, if the group includes one or more member employers
or other member groups [which have fifty] HAVING ONE  HUNDRED  or  fewer
employees or members exclusive of spouses and dependents. For [policies]
A POLICY issued or renewed on or after January first, two thousand four-
teen,  if  the  group  includes one or more member small group employers
eligible for coverage subject to this section, then such member  employ-
ers  shall  be  classified  as  small groups for rating purposes and the
remaining members shall be rated consistent with the rating rules appli-
cable to such remaining  members  pursuant  to  paragraph  two  of  this
subsection. [Provided, however this subsection shall not apply to groups
which  have  been  issued a policy on or before July first, two thousand
fifteen, and have member employers, who, on or  after  such  date,  have
between  fifty-one  and  one hundred employees, exclusive of spouses and

S. 6694                             3

dependents, and] (B) SUBPARAGRAPH A OF THIS PARAGRAPH SHALL NOT APPLY TO
EITHER THE RENEWAL OF A POLICY  ISSUED  TO  A  GROUP  OR  THE  ISSUANCE,
BETWEEN  JANUARY  FIRST, TWO THOUSAND SIXTEEN AND DECEMBER THIRTY-FIRST,
TWO  THOUSAND SIXTEEN, OF A POLICY, AND ANY RENEWAL THEREOF, TO A GROUP,
PROVIDED THAT THE FOLLOWING THREE REQUIREMENTS ARE MET:  (I)  THE  GROUP
HAD  BEEN ISSUED A POLICY THAT WAS IN EFFECT ON JULY FIRST, TWO THOUSAND
FIFTEEN; (II) THE GROUP HAD MEMBER EMPLOYERS,  WHO,  ON  OR  AFTER  JULY
FIRST,  TWO  THOUSAND  FIFTEEN,  HAVE  BETWEEN FIFTY-ONE AND ONE HUNDRED
EMPLOYEES, EXCLUSIVE OF SPOUSES AND DEPENDENTS; AND (III) the  group  is
either:  (i) [organized pursuant to article five-G of the general munic-
ipal  law  and  is]  comprised  entirely of one or more municipal corpo-
rations or districts (as such terms are defined in section  one  hundred
nineteen-n  of the general municipal law); or (ii) comprised entirely of
nonpublic schools providing education in any grade from pre-kindergarten
through twelfth grade. [For such groups which have been issued a  policy
on or before July first, two thousand fifteen, the applicability of this
subsection  shall  continue  irrespective of whether the group selects a
policy from a different insurer or if  the  member  employer  selects  a
different group for such coverage.]
  S  4.  Paragraph  1 of subsection (d) of section 4317 of the insurance
law, as amended by a chapter of the laws of 2015 amending the  insurance
law  relating  to catastrophic or reinsurance coverage issued to certain
small groups, as proposed in  legislative  bills  numbers  S.5928-A  and
A.8134-A, is amended to read as follows:
  (1)  (A) This section shall also apply to a contract issued to a group
defined in subsection (c) of section four thousand two  hundred  thirty-
five  of  this  chapter,  including but not limited to an association or
trust of employers, if the group includes one or more  member  employers
or  other  member  groups [which have fifty] HAVING ONE HUNDRED or fewer
employees  or  members  exclusive  of  spouses   and   dependents.   For
[contracts]  A CONTRACT issued or renewed on or after January first, two
thousand fourteen, if the group includes one or more member small  group
employers  eligible  for  coverage  subject  to  this section, then such
member employers shall be classified as small groups for rating purposes
and the remaining members shall be  rated  consistent  with  the  rating
rules  applicable to such remaining members pursuant to paragraph two of
this subsection.  [Provided, however this subsection shall not apply  to
groups  which  have  been  issued  a policy on or before July first, two
thousand fifteen, and have member employers, who, on or after such date,
have between fifty-one and one hundred employees, exclusive  of  spouses
and  dependents,  and]  (B)  SUBPARAGRAPH  A OF THIS PARAGRAPH SHALL NOT
APPLY TO EITHER THE RENEWAL OF A CONTRACT ISSUED TO A GROUP OR THE ISSU-
ANCE,  BETWEEN  JANUARY  FIRST,  TWO  THOUSAND  SIXTEEN   AND   DECEMBER
THIRTY-FIRST, TWO THOUSAND SIXTEEN, OF A CONTRACT, AND ANY RENEWAL THER-
EOF, TO A GROUP, PROVIDED THAT THE FOLLOWING THREE REQUIREMENTS ARE MET:
(I)  THE  GROUP  HAD  BEEN  ISSUED A CONTRACT THAT WAS IN EFFECT ON JULY
FIRST, TWO THOUSAND FIFTEEN; (II) THE GROUP HAD MEMBER  EMPLOYERS,  WHO,
ON OR AFTER JULY FIRST, TWO THOUSAND FIFTEEN, HAVE BETWEEN FIFTY-ONE AND
ONE  HUNDRED  EMPLOYEES,  EXCLUSIVE OF SPOUSES AND DEPENDENTS; AND (III)
the group is either: (i) [organized pursuant to article  five-G  of  the
general municipal law and are] comprised entirely of one or more munici-
pal  corporations or districts (as such terms are defined in section one
hundred nineteen-n of the general  municipal  law);  or  (ii)  comprised
entirely  of  nonpublic  schools  providing  education in any grade from
pre-kindergarten through twelfth grade. [For such groups which have been
issued a policy on or before  July  first,  two  thousand  fifteen,  the

S. 6694                             4

applicability  of this subsection shall continue irrespective of whether
the group selects a policy from a different insurer  or  if  the  member
employer selects a different group for such coverage.]
  S 5. Section 4 of a chapter of the laws of 2015 amending the insurance
law  relating  to catastrophic or reinsurance coverage issued to certain
small groups, as proposed in legislative bills numbers S.6004 and A.8300
is REPEALED.
  S 6. Section 5 of a chapter of the laws of 2015 amending the insurance
law relating to catastrophic or reinsurance coverage issued  to  certain
small  groups,  as  proposed  in  legislative  bills  numbers S.6004 and
A.8300, is amended to read as follows:
  S 5. This act shall take effect on the  same  date  and  in  the  same
manner  as  a  chapter  of  the  laws of 2015 amending the insurance law
relating to catastrophic or reinsurance coverage issued to certain small
groups, as proposed in legislative bills numbers S.5928-A and  A.8134-A,
takes effect AND SHALL BE DEEMED REPEALED THREE YEARS THEREAFTER.
  S  6-a. Section 5 of a chapter of the laws of 2015 amending the insur-
ance law relating to catastrophic  or  reinsurance  coverage  issued  to
certain  small groups, as proposed in legislative bills numbers S.5928-A
and A.8134-A, as amended by a chapter of the laws of 2015  amending  the
insurance law relating to catastrophic or reinsurance coverage issued to
certain  small  groups,  as proposed in legislative bills numbers S.6004
and A.8300, is amended to read as follows:
  S 5. This act shall take  effect  immediately;  and  shall  be  deemed
repealed [2] 3 years after it shall have become a law.
  S  7.  1. The superintendent of financial services shall contract with
an independent entity to conduct a review and draft a  report  assessing
the  impact  of:  (a)  prohibiting the sale of stop loss coverage to the
expanded small group market (groups sized 51 to 100); and  (b)  allowing
the  sale  of  stop loss coverage to groups that have between 51 and 100
employees or members and are exempt from paragraph 1 of  subsection  (h)
of section 3231 of the insurance law or paragraph 1 of subsection (e) of
section 4317 of the insurance law.
  2.  The  report  shall,  to  the extent information is available:  (a)
assess the impact of the above  mentioned  actions  on  the  ability  of
employers  of  51 to 100 employees to provide health insurance coverage.
Such impact analysis shall compare the financial costs to employers with
51 to 100 employees of providing health coverage  through  purchasing  a
small  group  policy  with providing self-funded benefit plans with stop
loss coverage; (b) set forth the impact on the premiums within the small
group comprehensive health insurance market from allowing such  exempted
groups  to  obtain  stop loss coverage, including analysis as to whether
allowing the sale of stop loss coverage to  such  exempted  groups  with
between 51 and 100 members results in adverse selection within the small
group  comprehensive  health insurance market by allowing such groups to
select either stop loss or a small group comprehensive health  insurance
product;  (c)  survey  and  describe  the number and features, including
wellness programs, of health  benefit  packages  available  to  employer
purchasers  of  health insurance in the small group market and employers
who provide self-funded benefits; (d) compare  the  differences  between
consumer  protections  provided  under  small group comprehensive health
insurance products and consumer protections provided  under  self-funded
benefit  plans, including differences in limits on cost sharing, network
adequacy, patient appeal rights, consumer review  of  rates  during  the
prior  approval  process,  examinations,  audits, oversight, and insurer
solvency requirements. The preparation of the  report  shall  include  a

S. 6694                             5

review  of  insured  rate filings, health insurance premium rating data,
small group enrollment, and surveys of employers and stop loss  carriers
from New York.
  3. The department of financial services shall submit its report to the
governor,  the  temporary  president  of  the senate, the speaker of the
assembly, and the chairs of the senate and assembly standing  committees
on insurance no later than March 1, 2018.
  4.  Each  authorized  insurer  that  writes stop loss coverage in this
state shall be responsible for the costs of the  contract  entered  into
pursuant to this section, in an amount in proportion to the gross direct
stop  loss  premiums  written  or  received by the insurer in this state
during the 2015 calendar year.
  S 8. This act shall take effect immediately; provided,  however,  that
sections  one,  two, five and seven of this act shall take effect on the
same date and in the same manner as a chapter of the laws of 2015 amend-
ing the insurance law relating to catastrophic or  reinsurance  coverage
issued to certain small groups, as proposed in legislative bills numbers
S.6004  and  A.8300,  takes effect; provided further that sections three
and four of this act shall take effect on the same date and in the  same
manner  as  a  chapter  of  the laws of 2015 amending the insurance law,
relating to catastrophic or reinsurance coverage issued to certain small
groups, as proposed in legislative bills numbers S.5928-A and  A.8134-A,
takes  effect  and  further  provided,  however,  that the amendments to
sections 3231 and 4317 of the insurance law made by sections  one,  two,
three  and  four  of  this  act  shall not affect the expiration of such
provisions and shall be deemed to expire therewith.

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