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.