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

                                  3852

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 28, 2009
                               ___________

Introduced by M. of A. WEPRIN, BARRA, SCHROEDER -- Multi-Sponsored by --
  M.  of  A.  ALFANO -- read once and referred to the Committee on Small
  Business

AN ACT to amend the insurance law and the state finance law, in relation
  to establishing the small business insurance pool

  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 article 43-A
to read as follows:
                               ARTICLE 43-A
                  SMALL BUSINESS INSURANCE POOL PROGRAM
SECTION 4351. DEFINITIONS.
        4352. SMALL BUSINESS INSURANCE BOARD.
        4353. SMALL BUSINESS INSURANCE POOL PROGRAM.
  S 4351. DEFINITIONS. AS USED IN THIS ARTICLE:
  (A) "SMALL BUSINESS INSURANCE BOARD" OR "SBIB" MEANS THE BOARD  ESTAB-
LISHED PURSUANT TO SECTION FOUR THOUSAND THREE HUNDRED FIFTY-TWO OF THIS
ARTICLE  TO  ESTABLISH  AND  MAINTAIN  THE SMALL BUSINESS INSURANCE POOL
PROGRAM.
  (B) "SMALL BUSINESS INSURANCE POOL PROGRAM" MEANS THE  PROGRAM  ESTAB-
LISHED PURSUANT TO SECTION FOUR THOUSAND THREE HUNDRED FIFTY-THREE UNDER
THE DIRECTION OF THE SBIB.
  (C)  "QUALIFIED  BUSINESS"  MEANS ANY PERSON, PROPRIETARY OR NONPROFIT
FIRM, CORPORATION OR PARTNERSHIP THAT IS ACTIVELY ENGAGED IN BUSINESS IN
THE STATE AND EMPLOYS AT LEAST ONE BUT NO MORE THAN ONE HUNDRED ELIGIBLE
EMPLOYEES, AS DEFINED IN THIS SECTION, AT LEAST  FIFTY  PERCENT  OF  THE
TIME  SUCH  BUSINESS  IS IN OPERATION. ANY BUSINESS THAT ELECTS TO LEAVE
THE SMALL BUSINESS INSURANCE POOL PROGRAM SHALL BE PRECLUDED FROM RE-EN-
TERING THE PROGRAM WITHIN TWELVE MONTHS THEREAFTER.
  (D) "ELIGIBLE EMPLOYEE" MEANS AN EMPLOYEE WHO  IS  EMPLOYED  AT  LEAST
FIFTY  PERCENT OF THE TIME AND IS EMPLOYED WITHIN THE STATE. ELIGIBILITY

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04640-02-9
              

A. 3852                             2

SHALL ALSO EXTEND TO THE DEPENDENTS, SPOUSE OR DOMESTIC PARTNER  OF  THE
ELIGIBLE EMPLOYEE.
  S  4352.  SMALL  BUSINESS  INSURANCE BOARD. (A) THERE IS HEREBY ESTAB-
LISHED WITHIN THE DEPARTMENT THE SMALL BUSINESS INSURANCE BOARD  (SBIB).
THE  BOARD  SHALL  CONSIST OF FIVE MEMBERS: ONE EACH TO BE CHOSEN BY THE
GOVERNOR, THE TEMPORARY PRESIDENT OF THE  SENATE,  THE  SPEAKER  OF  THE
ASSEMBLY,  THE  MINORITY LEADER OF THE SENATE AND THE MINORITY LEADER OF
THE ASSEMBLY PROVIDED THAT NO MEMBER OF THE BOARD SHALL BE AN  EMPLOYEE,
CONSULTANT  OR A MEMBER OF THE BOARD OF DIRECTORS OF ANY INSURER, HOSPI-
TAL SERVICE PLAN OR HEALTH CARE SERVICE PLAN, OR AN INSURANCE BROKER  OR
AGENT DOING BUSINESS IN THE STATE.
  (B) THE BOARD SHALL HAVE THE FOLLOWING RESPONSIBILITIES:
  (1) APPOINT AN ADMINISTRATOR WHO SHALL HIRE APPROPRIATE STAFF AS NEED-
ED.
  (2)  ENTER  INTO  CONTRACTS  WITH  CARRIERS TO PROVIDE HEALTH BENEFITS
COVERAGE TO ELIGIBLE EMPLOYEES AND THEIR DEPENDENTS.
  (3) DEFINE THE  HEALTH  BENEFITS  COVERAGE,  WHICH  THE  PROGRAM  WILL
CONTRACT  TO PURCHASE FROM PARTICIPATING CARRIERS, AND APPROVE THE PLANS
SOLD BY PARTICIPATING CARRIERS.
  (4) UNDERTAKE ACTIVITIES NECESSARY TO ADMINISTER  THE  SMALL  BUSINESS
INSURANCE POOL PROGRAM, INCLUDING MARKETING AND PUBLICIZING THE PROGRAM,
AND  ASSURING  CARRIER,  EMPLOYER,  AND ENROLLEE COMPLIANCE WITH PROGRAM
REQUIREMENTS.
  (5) ESTABLISH RULES, CONDITIONS, AND  PROCEDURES  FOR  SMALL  BUSINESS
EMPLOYERS AND PARTICIPATING CARRIERS.
  (6) ESTABLISH A FINANCIAL RELATIONSHIP DIRECTLY WITH AGENTS OR BROKERS
TO PROVIDE SERVICES UNDER THE SMALL BUSINESS INSURANCE POOL.
  (7) ESTABLISH A MECHANISM TO COLLECT PREMIUMS FROM SMALL EMPLOYERS AND
PAY PARTICIPATING CARRIERS.
  S  4353. SMALL BUSINESS INSURANCE POOL PROGRAM. (A) THE SMALL BUSINESS
INSURANCE BOARD  SHALL  ESTABLISH  THE  SMALL  BUSINESS  INSURANCE  POOL
PROGRAM  TO  BE  OPEN TO QUALIFIED BUSINESSES AS DEFINED IN SECTION FOUR
THOUSAND THREE HUNDRED FIFTY-ONE OF THIS ARTICLE.
  (B) WITHIN THE FIRST FIVE YEARS AFTER ESTABLISHING  THE  PROGRAM,  THE
SBIB  SHALL ENTER INTO CONTRACTS WITH CARRIERS, ACCEPT APPLICATIONS FROM
SMALL BUSINESSES AND GRANT  OR  DECLINE  PARTICIPATION  IN  THE  PROGRAM
PURSUANT TO REGULATIONS ESTABLISHED BY THE SBIB.
  (C)  UPON  ESTABLISHMENT  OF THE INITIAL POOL OF SMALL BUSINESSES, THE
SBIB SHALL CONTRACT WITH ELIGIBLE HEALTH INSURANCE CARRIERS FOR A SET OF
BENEFITS. SUCH SET OF BENEFITS SHALL INCLUDE,  BUT  NOT  NECESSARILY  BE
LIMITED  TO,  HOSPITAL AND PHYSICIAN VISITS, PRESCRIPTION DRUG BENEFITS,
MENTAL HEALTH SERVICES, AND DURABLE MEDICAL EQUIPMENT.
  (D) UPON CONTRACTUAL AGREEMENT BETWEEN  THE  STATE  AND  PARTICIPATING
CARRIERS  AND  HEALTH  CARE  PROVIDERS,  NOTIFICATION  SHALL  BE SENT TO
PARTICIPATING SMALL  BUSINESSES  AND  THEIR  EMPLOYEES  REGARDING  PLANS
AVAILABLE.
  (E)  PREMIUMS PAID BY PARTICIPATING SMALL BUSINESSES AND THEIR EMPLOY-
EES SHALL BE PAID DIRECTLY TO PARTICIPATING CARRIERS.
  (F) THE PREMIUMS PAID BY  PARTICIPATING  SMALL  BUSINESSES  AND  THEIR
EMPLOYEES SHALL ALSO INCLUDE A SURCHARGE SUFFICIENT TO COVER THE COST OF
THE  PROGRAM  BUT  NOT  TO  EXCEED  ONE  PERCENT  OF SUCH PREMIUMS. SUCH
SURCHARGES SHALL BE DEPOSITED IN THE SMALL BUSINESS INSURANCE POOL  FUND
ESTABLISHED  PURSUANT  TO SECTION NINETY-SEVEN-JJJJ OF THE STATE FINANCE
LAW.
  (G) THE SBIB SHALL HAVE THE AUTHORITY TO ADJUST PAYMENTS TO A  CARRIER
SHOULD THE SBIB FIND THAT A CARRIER HAS A SIGNIFICANTLY DISPROPORTIONATE

A. 3852                             3

SHARE  OF  HIGH-  OR LOW-RISK ENROLLEES. PRIOR TO MAKING SUCH A FINDING,
THE SBIB IS REQUIRED TO OBTAIN VALID DATA  FROM  PARTICIPATING  CARRIERS
AND  REPORTING  REQUIREMENTS  SHALL  BE MADE ADMINISTRATIVELY COMPATIBLE
WITH  THE  METHODS  OF  OPERATION  OF  THE  CARRIER.  ANY ADJUSTMENTS TO
PAYMENTS SHALL BE PROSPECTIVE AND SHALL UTILIZE  DEMOGRAPHIC  AND  OTHER
FACTORS ACTUARIALLY RELATED TO RISK.
  (H)  BENEFITS PROVIDED UNDER THE SMALL BUSINESS INSURANCE POOL PROGRAM
SHALL BE EQUAL TO OR GREATER THAN THE BENEFITS PROVIDED, AND CO-PAYMENTS
SHALL BE EQUAL TO OR LESS THAN THE CO-PAYMENTS, UNDER  THE  HEALTHY  NEW
YORK  PROGRAM ESTABLISHED IN SECTION FOUR THOUSAND THREE HUNDRED TWENTY-
SIX AND FOUR THOUSAND THREE HUNDRED TWENTY-SEVEN OF THIS CHAPTER.
  S 2. The state finance law is amended by adding a new section  97-jjjj
to read as follows:
  S  97-JJJJ.  SMALL  BUSINESS  INSURANCE  POOL FUND. 1. THERE IS HEREBY
ESTABLISHED IN THE JOINT CUSTODY OF THE STATE COMPTROLLER AND THE SUPER-
INTENDENT OF THE DEPARTMENT OF INSURANCE A FUND TO BE KNOWN AS THE SMALL
BUSINESS INSURANCE POOL FUND.
  2. THE FUND SHALL CONSIST OF THOSE MONEYS RECEIVED FROM THE SURCHARGES
PAID BY PARTICIPATING SMALL BUSINESSES IN THE SMALL  BUSINESS  INSURANCE
POOL  PROGRAM  PURSUANT TO SUBSECTION (F) OF SECTION FOUR THOUSAND THREE
HUNDRED FIFTY-THREE OF THE INSURANCE LAW.
  3. MONEYS IN THE SMALL BUSINESS  INSURANCE  POOL  FUND  SHALL  NOT  BE
COMMINGLED  WITH MONEYS IN ANY OTHER FUND UNDER THE CUSTODY OF THE STATE
COMPTROLLER.
  4. MONEYS OF THE FUND SHALL BE EXPENDED TO  COVER  THE  ADMINISTRATIVE
COSTS  OF  THE SMALL BUSINESS INSURANCE POOL PROGRAM. THE SUPERINTENDENT
OF INSURANCE SHALL CERTIFY TO THE STATE  COMPTROLLER  THE  AMOUNTS  FROM
SUCH  FUND  WHICH ARE TO BE PAID TO SUCH CARRIERS AND ANY APPROPRIATIONS
PROVIDED THEREFOR. ANY CARRY-OVER BALANCE IN THE FUND SHALL BE  REAPPRO-
PRIATED EACH YEAR BY AN ACT OF THE LEGISLATURE.
  5.  MONEYS SHALL BE PAID OUT OF THE FUND UPON AUDIT AND WARRANT OF THE
STATE COMPTROLLER ON VOUCHERS CERTIFIED AND APPROVED BY THE  SUPERINTEN-
DENT OF INSURANCE.
  S  3.  This  act shall take effect January 1, 2010; provided, however,
that effective immediately, the addition, amendment and/or repeal of any
rule or regulation necessary for the implementation of this act  on  its
effective  date  are authorized and directed to be made and completed on
or before such effective date.