Assembly Bill A6390

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

                                  6390

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                              March 3, 2009
                               ___________

Introduced  by M. of A. JOHN, GOTTFRIED, SCHROEDER -- Multi-Sponsored by
  -- M. of A. KELLNER -- read once and  referred  to  the  Committee  on
  Insurance

AN  ACT  to  amend  the  insurance  law, in relation to labor-management
  health benefit fund participation in the Healthy New York program; and
  providing for the repeal of such provisions upon expiration thereof

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

  Section 1. Section 4326 of the insurance law, as added by chapter 1 of
the  laws  of 1999, subsection (b) as amended by chapter 342 of the laws
of 2004, subparagraph (A) of paragraph 1 of subsection (c) and  subpara-
graph  (C) of paragraph 3 of subsection (c) as amended by chapter 419 of
the laws of 2000, subsections (d-1), (d-2) and (d-3) as added by chapter
645 of the laws of 2005, is amended to read as follows:
  S 4326. Standardized health insurance contracts for qualifying [small]
employers and individuals. (a) A program is hereby established  for  the
purpose  of  making  standardized  health  insurance contracts OR HEALTH
BENEFITS PROVIDED BY A  HEALTH  BENEFIT  FUND  available  to  qualifying
[small] employers and qualifying individuals as defined in this section.
Such  program is designed to encourage [small] employers to offer health
insurance coverage to their employees and to also make  coverage  avail-
able  to uninsured employees whose employers do not provide group health
insurance. FOR THE PURPOSES OF THIS SECTION, THE  TERM  "HEALTH  BENEFIT
FUND"  SHALL MEAN A FEDERAL INTERNAL REVENUE SERVICE QUALIFIED MULTI-EM-
PLOYER HEALTH BENEFIT PLAN REGULATED BY THE FEDERAL DEPARTMENT OF  LABOR
PURSUANT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT.
  (b)  Participation  in  the  program  established  by this section and
section four thousand three hundred  twenty-seven  of  this  article  is
limited  to  corporations  or  insurers organized or licensed under this
article or article forty-two of this chapter [and],  health  maintenance
organizations issued a certificate of authority under article forty-four

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08286-01-9
              

A. 6390                             2

of the public health law or licensed under this article AND HEALTH BENE-
FIT  FUNDS.  Participation  by  all  health maintenance organizations is
mandatory, provided, however, that such requirements shall not apply  to
a   health  maintenance  organization  exclusively  serving  individuals
enrolled pursuant to title eleven of article five of the social services
law, title eleven-D of article five of the social  services  law,  title
one-A  of article twenty-five of the public health law or title eighteen
of the federal Social Security Act, and,  further  provided,  that  such
health  maintenance organization shall not discontinue a contract for an
individual receiving comprehensive-type  coverage  in  effect  prior  to
January  first, two thousand four who is ineligible to purchase policies
offered after such date pursuant to this section or section  four  thou-
sand three hundred twenty-two of this article due to the provision of 42
U.S.C.  1395ss  in  effect prior to January first, two thousand four. On
and after January first, two thousand one, all health maintenance organ-
izations shall offer qualifying group  health  insurance  contracts  and
qualifying  individual  health  insurance  contracts  as defined in this
section. For the purposes of this  section  and  section  four  thousand
three  hundred  twenty-seven of this article, article forty-three corpo-
rations [or], article forty-two insurers, OR HEALTH BENEFIT FUNDS  which
voluntarily  participate  in  compliance  with  the requirements of this
program shall be eligible for reimbursement from  the  stop  loss  funds
created  pursuant to section four thousand three hundred twenty-seven of
this article under the same terms and conditions as  health  maintenance
organizations.
  (c)  The  following  definitions  shall be applicable to the insurance
contracts OR HEALTH BENEFIT PACKAGES offered under  the  program  estab-
lished by this section:
  (1) A qualifying [small] employer is an employer that is either:
  (A) An individual proprietor who is the only employee of the business:
  (i)  without  health  insurance  which provides benefits on an expense
reimbursed or prepaid basis in effect during  the  twelve  month  period
prior  to  application  for a qualifying group health insurance contract
under the program established by this section; and
  (ii) resides in a household having a net household income at or  below
two  hundred  eight  percent  of  the non-farm federal poverty level (as
defined and updated by  the  federal  department  of  health  and  human
services) or the gross equivalent of such net income;
  (iii)  except  that  the  requirements  set  forth in item (i) of this
subparagraph shall not be applicable where an individual proprietor  had
health  insurance  coverage  during  the previous twelve months and such
coverage terminated due to one of the reasons set  forth  in  items  (i)
through (viii) of subparagraph (C) of paragraph three of THIS subsection
[(c) of this section]; or
  (B) An employer with:
  (i) not more than fifty eligible employees;
  (ii)  no  group health insurance which provides benefits on an expense
reimbursed or prepaid basis covering  employees  in  effect  during  the
twelve  month  period prior to application for a qualifying group health
insurance contract under the program established by this section; and
  (iii) at least thirty percent  of  its  eligible  employees  receiving
annual  wages  from the employer at a level equal to or less than thirty
thousand dollars. The thirty thousand dollar figure  shall  be  adjusted
periodically pursuant to subparagraph (F) of this paragraph[.]; OR
  (IV)(1) NOTWITHSTANDING THE OTHER PROVISIONS OF THIS SUBSECTION A FUND
PARTICIPATION AGREEMENT OR COLLECTIVE BARGAINING AGREEMENT THAT REQUIRES

A. 6390                             3

THAT  THE  EMPLOYER  MAINTAIN  A  CONTRIBUTION FOR EMPLOYEE GROUP HEALTH
BENEFITS TO A HEALTH BENEFIT FUND OR HEALTH BENEFIT PLAN, NINETY PERCENT
OF WHOSE MEMBERS RECEIVE GROSS INCOME FROM A  CONTRIBUTING  EMPLOYER  OF
THIRTY-THREE  THOUSAND  DOLLARS  OR  LESS, OR (2) AN EMPLOYER WITH THREE
HUNDRED OR FEWER EMPLOYEES, BUT MORE THAN TWO HUNDRED, OF WHOM AT  LEAST
SEVENTY-FIVE  PERCENT RECEIVE GROSS INCOME FROM THAT EMPLOYER OF THIRTY-
THREE THOUSAND DOLLARS PER YEAR OR LESS OR, (3)  AN  EMPLOYER  WITH  TWO
HUNDRED  OR FEWER EMPLOYEES, BUT MORE THAN FIFTY, OF WHOM AT LEAST FIFTY
PERCENT RECEIVE GROSS INCOME FROM THAT EMPLOYER OF THIRTY-THREE THOUSAND
DOLLARS OR LESS OR, (4) AN EMPLOYER WITH FIFTY  OR  FEWER  EMPLOYEES  OF
WHOM   THIRTY  PERCENT  RECEIVE  GROSS  INCOME  FROM  THAT  EMPLOYER  OF
THIRTY-THREE THOUSAND DOLLARS OR LESS. SALARY FIGURES SHALL BE  ADJUSTED
PERIODICALLY  PURSUANT  TO  SUBPARAGRAPH (F) OF THIS PARAGRAPH.  FOR THE
PURPOSES OF THIS SECTION, THE  SUPERINTENDENT  MAY  ALSO  CALCULATE  THE
NUMBER OF EMPLOYEES OF AN EMPLOYER BASED ON THE EMPLOYMENT AT A WORKSITE
LOCATED WITHIN THE STATE OF NEW YORK.
  (C) The requirements set forth in item (i) of subparagraph (A) of this
paragraph  and  in item (ii) of subparagraph (B) of this paragraph shall
not be applicable where an individual proprietor or employer  is  trans-
ferring from a health insurance contract issued pursuant to the New York
state small business health insurance partnership program established by
section  nine hundred twenty-two of the public health law or from health
care coverage issued pursuant to a regional pilot project for the  unin-
sured  established  by section one thousand one hundred eighteen of this
chapter.
  (D) The twelve month period set forth in item (i) of subparagraph  (A)
of this paragraph and in item (ii) of subparagraph (B) of this paragraph
may  be  adjusted  by  the superintendent from twelve months to eighteen
months if he OR SHE determines that the twelve month period is  insuffi-
cient  to  prevent  inappropriate substitution of other health insurance
contracts for qualifying group health insurance contracts.
  (E) An individual proprietor or employer shall cease to be a  qualify-
ing  [small] employer if any health insurance which provides benefits on
an expense reimbursed or prepaid basis covering the individual  proprie-
tor  or  an  employer's  employees,  other  than qualifying group health
insurance purchased pursuant to this section, is purchased or  otherwise
takes effect subsequent to purchase of qualifying group health insurance
under the program established by this section.
  (F)  The  wage  levels  utilized in subparagraph (B) of this paragraph
shall be adjusted annually, beginning in two thousand two.  The  adjust-
ment  shall  take effect on July first of each year. For July first, two
thousand two, the adjustment shall be a percentage of  the  annual  wage
figure  specified  in subparagraph (B) of this paragraph. For subsequent
years, the adjustment shall be a percentage of the  annual  wage  figure
which  took  effect  on  July  first  of  the prior year. The percentage
adjustment shall be the same percentage  by  which  the  current  year's
non-farm  federal  poverty  level, as defined and updated by the federal
department of health and human services,  for  a  family  unit  of  four
persons  for  the  forty-eight  contiguous  states and Washington, D.C.,
changed from the same level established for the prior year.
  (2) A qualifying group health insurance contract is a  group  contract
purchased from a health maintenance organization, corporation or insurer
by  a  qualifying [small] employer which provides the benefits set forth
in subsection (d) of this section OR A  HEALTH  BENEFITS  PACKAGE  WHICH
PROVIDES  THE  BENEFITS  SET  FORTH  IN  SUBSECTION (D) OF THIS SECTION,
PROVIDED BY A HEALTH BENEFITS FUND. The contract OR BENEFIT PACKAGE must

A. 6390                             4

insure OR PROVIDE THE BENEFITS SET  FORTH  IN  SUBSECTION  (D)  OF  THIS
SECTION  TO  not  less  than fifty percent of the employees eligible for
coverage.
  (3)(A) A qualifying individual is an employed person:
  (i)  who  does not have and has not had health insurance with benefits
on an expense reimbursed or prepaid basis during the twelve month period
prior to the individual's application for  health  insurance  under  the
program  established by this section OR HAS HAD SUCH TWELVE MONTH PERIOD
WAIVED BY THE SUPERINTENDENT PURSUANT TO THIS SECTION. IN NO EVENT SHALL
SUCH EMPLOYER CONTRIBUTION BE LESS  THAN  FIFTY  PERCENT  OF  THE  TOTAL
PREMIUM  COST,  AND  FOR  THE PURPOSES OF THIS SECTION, FUNDS FOR DIRECT
CARE WORKER RECRUITMENT AND RETENTION PROGRAMS PROVIDED TO PERSONAL CARE
SERVICE PROVIDERS PURSUANT TO SECTION THREE HUNDRED SIXTY-SEVEN-Q OF THE
SOCIAL SERVICES LAW SHALL BE DEEMED EMPLOYER CONTRIBUTIONS;
  (ii) whose employer does not provide group health  insurance  and  has
not  provided  group  health insurance with benefits on an expense reim-
bursed or prepaid basis covering employees in effect during  the  twelve
month  period prior to the individual's application for health insurance
under the program established by this section OR  HAS  HAD  SUCH  TWELVE
MONTH  PERIOD WAIVED BY THE SUPERINTENDENT PURSUANT TO THE PROVISIONS OF
THIS SECTION;
  (iii) resides in a household having a net household income at or below
two hundred eight percent of the  non-farm  federal  poverty  level  (as
defined  and  updated  by  the  federal  department  of health and human
services) or the gross equivalent of such net income; and
  (iv) is ineligible for Medicare.
  (B) The requirements set forth in items (i) and (ii)  of  subparagraph
(A)  of  this  paragraph  shall not be applicable where an individual is
transferring from a health insurance contract  issued  pursuant  to  the
voucher  insurance  program  established  by  section  one  thousand one
hundred twenty-one of this chapter, a health insurance  contract  issued
pursuant  to the New York state small business health insurance partner-
ship program established by  section  nine  hundred  twenty-two  of  the
public  health law or health care coverage issued pursuant to a regional
pilot project for the uninsured established by section one thousand  one
hundred eighteen of this chapter.
  (C)  The  requirements set forth in items (i) and (ii) of subparagraph
(A) of this paragraph shall not be applicable where  an  individual  had
health  insurance  coverage  during  the previous twelve months and such
coverage terminated due to:
  (i) loss of employment due to factors other than voluntary separation;
  (ii) death of a family member which results in termination of coverage
under a health insurance contract under which the individual is covered;
  (iii) change to a new employer that  does  not  provide  group  health
insurance with benefits on an expense reimbursed or prepaid basis;
  (iv)  change  of  residence so that no employer-based health insurance
with benefits on an expense reimbursed or prepaid basis is available;
  (v) discontinuation of a group health insurance contract with benefits
on an expense reimbursed or prepaid basis covering the qualifying  indi-
vidual as an employee or dependent;
  (vi)  expiration  of the coverage periods established by the continua-
tion provisions of the  Employee  Retirement  Income  Security  Act,  29
U.S.C.    section  1161  et  seq.  and the Public Health Service Act, 42
U.S.C.  section 300bb-1 et seq. established by the Consolidated  Omnibus
Budget  Reconciliation  Act  of  1985,  as  amended, or the continuation
provisions of subsection (m) of section three thousand two hundred twen-

A. 6390                             5

ty-one, subsection (k) of section four thousand three hundred  four  and
subsection (e) of section four thousand three hundred five of this chap-
ter;
  (vii)  legal  separation, divorce or annulment which results in termi-
nation of coverage under a health insurance  contract  under  which  the
individual is covered; or
  (viii) loss of eligibility under a group health plan.
  (D) The twelve month period set forth in items (i) and (ii) of subpar-
agraph  (A) of this paragraph may be adjusted by the superintendent from
twelve months to eighteen months if he OR SHE determines that the twelve
month period is insufficient to prevent  inappropriate  substitution  of
other health insurance contracts for qualifying individual health insur-
ance contracts.
  (4) A qualifying individual health insurance contract is an individual
contract  issued  directly to a qualifying individual and which provides
the benefits set forth in subsection (d) of this section. At the  option
of  the  qualifying  individual,  such contract may include coverage for
dependents of the qualifying individual.
  (d) The contracts issued pursuant to this section  by  health  mainte-
nance  organizations, corporations [or], insurers OR, THE HEALTH BENEFIT
PACKAGE WHICH  PROVIDES  THE  BENEFITS  SET  FORTH  IN  THIS  SUBSECTION
PROVIDED  BY  HEALTH  BENEFIT  FUNDS  and approved by the superintendent
shall only provide in-plan benefits, except for emergency care or  where
services  are  not  available through a plan provider.  Covered services
shall include only the following:
  (1) inpatient hospital services consisting of daily  room  and  board,
general  nursing care, special diets and miscellaneous hospital services
and supplies;
  (2) outpatient hospital services consisting of diagnostic  and  treat-
ment services;
  (3)   physician   services  consisting  of  diagnostic  and  treatment
services, consultant and referral services, surgical services (including
breast reconstruction surgery after a mastectomy), anesthesia  services,
second surgical opinion, and a second opinion for cancer treatment;
  (4) outpatient surgical facility charges related to a covered surgical
procedure;
  (5) preadmission testing;
  (6) maternity care;
  (7) adult preventive health services consisting of mammography screen-
ing; cervical cytology screening; periodic physical examinations no more
than once every three years; and adult immunizations;
  (8) preventive and primary health care services for dependent children
including routine well-child visits and necessary immunizations;
  (9)  equipment,  supplies and self-management education for the treat-
ment of diabetes;
  (10) diagnostic x-ray and laboratory services;
  (11) emergency services;
  (12) therapeutic services consisting of radiologic services,  chemoth-
erapy and hemodialysis;
  (13)  blood and blood products furnished in connection with surgery or
inpatient hospital services; and
  (14) prescription drugs obtained at a participating pharmacy. In addi-
tion to providing coverage at a participating pharmacy,  health  mainte-
nance  organizations may utilize a mail order prescription drug program.
Health maintenance organizations may provide prescription drugs pursuant
to a drug formulary;  however,  health  maintenance  organizations  must

A. 6390                             6

implement   an   appeals  process  so  that  the  use  of  non-formulary
prescription drugs may be requested by a physician.
  (d-1)  Covered  services  shall  not  include  drugs,  procedures  and
supplies for the treatment of erectile dysfunction when provided to,  or
prescribed  for  use  by,  a person who is required to register as a sex
offender pursuant to article six-C of the correction law, provided that:
(1) any denial of coverage pursuant to this subsection shall provide the
enrollee with the means of obtaining additional  information  concerning
both the denial and the means of challenging such denial; (2) all drugs,
procedures and supplies for the treatment of erectile dysfunction may be
subject to prior authorization by corporations, insurers or health main-
tenance  organizations for the purposes of implementing this subsection;
and (3) the superintendent shall promulgate regulations to implement the
denial of coverage pursuant to this subsection giving health maintenance
organizations, corporations and insurers at least sixty  days  following
promulgation  of  the  regulations  to implement their denial procedures
pursuant to this subsection.
  (d-2) No person or entity authorized to provide  coverage  under  this
section  shall be subject to any civil or criminal liability for damages
for any decision or action pursuant to subsection (d-1) of this section,
made in the ordinary course of business if  that  authorized  person  or
entity  acted reasonably and in good faith with respect to such informa-
tion.
  (d-3) Notwithstanding any other provision of law, if the  commissioner
of  health  makes  a  finding  pursuant  to  subdivision twenty-three of
section two hundred six of the public health law, the superintendent  is
authorized  to  remove  a  drug,  procedure  or supply from the services
covered by the standardized health  insurance  contract  established  by
this  section  for  those  persons required to register as sex offenders
pursuant to article six-C of the correction law.
  (e) The benefits provided in the contracts described in subsection (d)
of this section shall be subject to the following deductibles and copay-
ments:
  (1) in-patient hospital services shall  have  a  five  hundred  dollar
copayment for each continuous hospital confinement;
  (2) surgical services shall be subject to a copayment of the lesser of
twenty  percent  of the cost of such services or two hundred dollars per
occurrence;
  (3) outpatient surgical facility charges shall be subject to a facili-
ty copayment charge of seventy-five dollars per occurrence;
  (4) emergency services shall have a fifty dollar copayment which  must
be waived if hospital admission results from the emergency room visit;
  (5)  prescription  drugs shall have a one hundred dollar calendar year
deductible per individual. After the deductible is satisfied, each thir-
ty-four day supply of a prescription drug will be subject  to  a  copay-
ment.  The  copayment  will  be  ten dollars if the drug is generic. The
copayment for a brand name drug will be twenty dollars plus the  differ-
ence  in  cost  between  the  brand name drug and the equivalent generic
drug. If a mail order drug program is utilized, a twenty  dollar  copay-
ment  shall  be  imposed  on a ninety day supply of generic prescription
drugs. A forty dollar copayment plus the difference in cost between  the
brand  name  drug  and the equivalent generic drug shall be imposed on a
ninety day supply of brand name prescription drugs. In  no  event  shall
the copayment exceed the cost of the prescribed drug;
  (6)  the  maximum coverage for prescription drugs shall be three thou-
sand dollars per individual in a calendar year; and

A. 6390                             7

  (7) all other services shall have a twenty dollar copayment  with  the
exception of prenatal care which shall have a ten dollar copayment.
  (f)  Except  as included in the list of covered services in subsection
(d) of this section, the mandated and make-available benefits set  forth
in  sections  three  thousand  two  hundred  sixteen, three thousand two
hundred twenty-one of this chapter and four thousand three hundred three
of this article shall not be applicable to the contracts issued pursuant
to this section. Mandated benefits included in such contracts  shall  be
subject to the deductibles and copayments set forth in subsection (e) of
this section.
  (g)  The  superintendent shall be authorized to modify, by regulation,
the copayment and deductible amounts described in this  section  if  the
superintendent  determines  such  amendments are necessary to facilitate
implementation of this section. On or after January first, two  thousand
two, the superintendent shall be authorized to establish, by regulation,
one  or  more additional standardized health insurance benefit packages,
INCLUDING PACKAGES FOR PART-TIME EMPLOYEES, if the superintendent deter-
mines additional benefit packages with different levels of benefits  are
necessary  to  meet  the  needs of the public.  THE SUPERINTENDENT SHALL
ESTABLISH A PACKAGE BY REGULATION IN ADDITION TO OTHER  PACKAGES  ESTAB-
LISHED  PURSUANT TO THIS SECTION THAT SHALL PROVIDE MENTAL HEALTH, ALCO-
HOL, AND SUBSTANCE ABUSE BENEFITS EQUIVALENT TO THOSE  PROVIDED  FOR  IN
SECTION THREE HUNDRED SIXTY-NINE-EE OF THE SOCIAL SERVICES LAW.
  (h)  A  health  maintenance  organization, corporation, HEALTH BENEFIT
FUND or insurer must offer the benefit package [without change or  addi-
tional  benefits]  PROVIDED  HOWEVER THAT THE SUPERINTENDENT MAY APPROVE
ADDITIONAL OR IMPROVED BENEFITS THAT ARE IN THE PUBLIC INTEREST.  Quali-
fying  [small] employers shall be issued the benefit package in a quali-
fying group health insurance contract. Qualifying individuals  shall  be
issued  the  benefit package in a qualifying individual health insurance
contract.
  (i) A HEALTH BENEFIT FUND,  health  maintenance  organization,  corpo-
ration  or  insurer shall obtain from the employer or individual written
certification at the time of initial application and annually thereafter
ninety days prior to the contract renewal date  that  such  employer  or
individual  meets the requirements of a qualifying [small] employer or a
qualifying individual pursuant to this  section.  [A]  SUCH  PLAN  OR  A
health  maintenance organization, corporation or insurer may require the
submission of appropriate documentation in support of the certification.
  (j) Applications for qualifying group health insurance  contracts  and
qualifying  individual  health insurance contracts must be accepted from
any qualifying individual and any qualifying  [small]  employer  at  all
times  throughout  the  year.  The  superintendent,  by  regulation, may
require health maintenance organizations, corporations  or  insurers  to
give preference to qualifying [small] employers whose eligible employees
have the lowest average salaries.
  (k) All coverage under a qualifying group health insurance contract or
a  qualifying  individual health insurance contract must be subject to a
pre-existing condition limitation provision as  set  forth  in  sections
three  thousand two hundred thirty-two of this chapter and four thousand
three hundred eighteen of this article, including the crediting require-
ments thereunder. The underwriting of such  contracts  may  not  involve
more than the imposition of a pre-existing condition limitation.
  (l)  A  qualifying [small] employer OR HEALTH BENEFIT FUND shall elect
whether to make coverage under the  qualifying  group  health  insurance
contract available to dependents of employees. Any employee or dependent

A. 6390                             8

who  is enrolled in Medicare is ineligible for coverage, unless required
by federal law.  Dependents of an employee who is enrolled  in  Medicare
will  be  eligible  for dependent coverage provided the dependent is not
also enrolled in Medicare.
  (m)  A  qualifying [small] employer must pay at least fifty percent of
the premium for employees covered under a qualifying group health insur-
ance contract and must offer coverage to all employees receiving  annual
wages  at  a  level of thirty thousand dollars or less, and at least one
such employee shall accept such coverage.  The  thirty  thousand  dollar
wage  level  shall  be adjusted periodically in accordance with subpara-
graph (F) of paragraph one  of  subsection  (c)  of  this  section.  The
employer  premium  contribution  must  be  the  same  percentage for all
covered employees.
  (n) Premium rate calculations for qualifying  group  health  insurance
contracts  and qualifying individual health insurance contracts shall be
subject to the following:
  (1) coverage must be community rated and include rate tiers for  indi-
viduals, two adult families and at least one other family tier. The rate
differences  must  be  based upon the cost differences for the different
family units and the rate tiers must be uniformly applied. The rate tier
structure used by a  health  maintenance  organization,  corporation  or
insurer  for the contracts issued to qualifying [small] employers and to
qualifying individuals must be the same;
  (2) if geographic rating areas are  utilized,  such  geographic  areas
must  be reasonable and in a given case may include a single county. The
geographic areas utilized must be the same for the contracts  issued  to
qualifying  [small]  employers and to qualifying individuals. The super-
intendent shall not require the inclusion  of  any  specific  geographic
region within the proposed community rated region selected by the health
maintenance  organization,  corporation or insurer so long as the health
maintenance organization, corporation or insurer's proposed  regions  do
not  contain  configurations  designed  to avoid or segregate particular
areas within a county covered by the  health  maintenance  organization,
corporation or insurer's community rates.
  (3)  claims  experience  under  contracts issued to qualifying [small]
employers and to qualifying individuals must be pooled for rate  setting
purposes.  The  premium  rates  for  qualifying  group  health insurance
contracts and qualifying individual health insurance contracts  must  be
the same.
  (o)  A  HEALTH  BENEFIT  FUND, health maintenance organization, corpo-
ration or insurer shall submit reports to  the  superintendent  in  such
form and at times as may be reasonably required in order to evaluate the
operations  and  results  of the standardized health insurance OR HEALTH
BENEFIT program established by this section.
  (p) Notwithstanding any other provision of law,  all  individuals  and
small  businesses  that  are  participating  in  or covered by insurance
contracts or policies issued pursuant to the New York state small  busi-
ness  health  insurance  partnership program established by section nine
hundred twenty-two of the  public  health  law,  the  voucher  insurance
program  established  by  section one thousand one hundred twenty-one of
this chapter, or uninsured pilot programs established pursuant to  chap-
ter  seven  hundred  three  of the laws of nineteen hundred eighty-eight
shall be eligible for participation in the standardized health insurance
contracts established by this section, regardless of any of  the  eligi-
bility  requirements  established  pursuant  to  subsection  (c) of this
section.

A. 6390                             9

  S 2. Section 4327 of the insurance law, as added by chapter 1  of  the
laws  of  1999,  subsection (h) as amended by chapter 419 of the laws of
2000 and subsection (s) as amended and subsection (t) as added by  chap-
ter 441 of the laws of 2006, is amended to read as follows:
  S  4327.  Stop  loss funds for standardized health insurance contracts
issued to qualifying [small] employers and qualifying individuals OR FOR
HEALTH  BENEFIT  PACKAGES  WHICH  PROVIDE  THE  BENEFITS  SET  FORTH  IN
SUBSECTION (D) OF SECTION FOUR THOUSAND THREE HUNDRED TWENTY-SIX OF THIS
ARTICLE  PROVIDED BY HEALTH BENEFIT FUNDS.  (a) The superintendent shall
establish a fund from which  health  maintenance  organizations,  corpo-
rations  or  insurers  may receive reimbursement, to the extent of funds
available therefor, for claims paid by such health maintenance organiza-
tions, corporations or insurers for  members  covered  under  qualifying
group  health  insurance contracts issued pursuant to section four thou-
sand three hundred twenty-six of this article. This fund shall be  known
as  the  "[small]  employer  stop  loss  fund". The superintendent shall
establish a separate and distinct fund  from  which  health  maintenance
organizations,  corporations  or  insurers may receive reimbursement, to
the extent of funds available therefor, for claims paid by  such  health
maintenance  organizations, corporations, HEALTH BENEFIT FUNDS or insur-
ers for members covered under  qualifying  individual  health  insurance
contracts  issued  pursuant to section four thousand three hundred twen-
ty-six of this article. This fund shall  be  known  as  the  "qualifying
individual  stop loss fund".  FOR THE PURPOSES OF THIS SECTION, THE TERM
"HEALTH BENEFIT FUND" SHALL MEAN  A  FEDERAL  INTERNAL  REVENUE  SERVICE
QUALIFIED  MULTI-EMPLOYER  HEALTH  BENEFIT PLAN REGULATED BY THE FEDERAL
DEPARTMENT OF LABOR PURSUANT TO THE EMPLOYEE RETIREMENT INCOME  SECURITY
ACT.
  (b)  Commencing on January first, two thousand one, health maintenance
organizations, HEALTH BENEFIT FUNDS, corporations or insurers  shall  be
eligible  to  receive  reimbursement  for  ninety percent of claims paid
between [thirty] FIVE thousand and [one hundred]  SEVENTY-FIVE  thousand
dollars  in  a calendar year for any member covered under a standardized
contract issued pursuant to section four thousand three hundred  twenty-
six  of  this  article. Claims paid for members covered under qualifying
group health insurance contracts shall be reimbursable from the  [small]
employer  stop loss fund. Claims paid for members covered under qualify-
ing individual health insurance contracts shall be reimbursable from the
qualifying individual stop loss fund. For the purposes of this  section,
claims  shall  include  health  care claims paid by a health maintenance
organization on behalf of a covered member pursuant to such standardized
contracts.
  (c) The superintendent shall promulgate  regulations  that  set  forth
procedures  for the operation of the [small] employer stop loss fund and
the qualifying individual stop loss  fund  and  distribution  of  monies
therefrom.
  (d)  The [small] employer stop loss fund shall operate separately from
the qualifying  individual  stop  loss  fund.  Except  as  specified  in
subsection  (b)  of this section with respect to calendar year two thou-
sand one, the level of stop  loss  coverage  for  the  qualifying  group
health  insurance  contracts and the qualifying individual health insur-
ance contracts need not be the same. The two stop loss funds need not be
structured or operated in the same manner, except as specified  in  this
section.  The monies available for distribution from the stop loss funds
may be reallocated between the [small] employer stop loss fund  and  the

A. 6390                            10

qualifying  individual  stop  loss fund if the superintendent determines
that such reallocation is warranted due to enrollment trends.
  (e)  Claims  shall be reported and funds shall be distributed from the
[small] employer stop loss fund and from the qualifying individual  stop
loss  fund  on  a  calendar  year  basis.  Claims  shall be eligible for
reimbursement only for the calendar year in which the claims  are  paid.
Once  claims  paid  on  behalf  of  a covered member reach or exceed one
hundred thousand dollars in a given calendar  year,  no  further  claims
paid  on  behalf  of such member in that calendar year shall be eligible
for reimbursement.
  (f) Each health maintenance organization, corporation, HEALTH  BENEFIT
FUND  or  insurer  shall submit a request for reimbursement from each of
the stop loss funds on forms prescribed by the superintendent.  Each  of
the  requests  for  reimbursement shall be submitted no later than April
first following the end of the calendar year for which the reimbursement
requests are being made. The superintendent may require  health  mainte-
nance  organizations,  corporations, HEALTH BENEFIT FUNDS or insurers to
submit such claims data in connection with the reimbursement requests as
he OR SHE deems necessary to enable him OR HER to distribute monies  and
oversee  the operation of the [small] employer and qualifying individual
stop loss funds. The  superintendent  may  require  that  such  data  be
submitted  on  a  per  member,  aggregate and/or categorical basis. Data
shall be reported  separately  for  qualifying  group  health  insurance
contracts  and  qualifying  individual health insurance contracts issued
pursuant to section four thousand three hundred twenty-six of this arti-
cle.
  (g) For each stop loss fund, the superintendent  shall  calculate  the
total  claims  reimbursement amount for all health maintenance organiza-
tions, corporations, HEALTH BENEFIT FUNDS or insurers for  the  calendar
year for which claims are being reported.
  (1) In the event that the total amount requested for reimbursement for
a calendar year exceeds funds available for distribution for claims paid
during that same calendar year, the superintendent shall provide for the
pro-rata  distribution  of  the available funds. Each health maintenance
organization, corporation, HEALTH  BENEFIT  FUND  or  insurer  shall  be
eligible  to  receive  only  such  proportionate amount of the available
funds   as   the   individual   health    maintenance    organization's,
corporation's,  HEALTH BENEFIT FUND'S or insurer's total eligible claims
paid bears to the total eligible claims paid by all  health  maintenance
organizations, corporations or insurers.
  (2) In the event that funds available for distribution for claims paid
by  all  health  maintenance organizations, corporations, HEALTH BENEFIT
FUNDS or insurers during  a  calendar  year  exceeds  the  total  amount
requested  for  reimbursement  by  all health maintenance organizations,
corporations or insurers during that  same  calendar  year,  any  excess
funds  shall  be  carried forward and made available for distribution in
the next calendar year. Such excess funds shall be in  addition  to  the
monies appropriated for the stop loss fund in the next calendar year.
  (h)  Upon  the  request of the superintendent, each health maintenance
organization shall be required to furnish such data as  the  superinten-
dent  deems  necessary  to oversee the operation of the [small] employer
and qualifying individual stop loss funds. Such data shall be  furnished
in  a  form  prescribed  by  the superintendent. Each health maintenance
organization, corporation, HEALTH BENEFIT FUND or insurer shall  provide
the  superintendent  with monthly reports of the total enrollment OF THE
HEALTH BENEFIT FUND OR THE ENROLLMENT under the qualifying group  health

A. 6390                            11

insurance  contracts  and  the  qualifying  individual  health insurance
contracts issued pursuant to section four thousand three  hundred  twen-
ty-six of this article. The reports shall be in a form prescribed by the
superintendent.
  (i) The superintendent shall separately estimate the per member annual
cost of total claims reimbursement from each stop loss fund for qualify-
ing  individual  health  insurance  contracts  and  for qualifying group
health insurance contracts based upon  available  data  and  appropriate
actuarial  assumptions.  Upon request, each health maintenance organiza-
tion, corporation or insurer shall furnish to the superintendent  claims
experience data for use in such estimations.
  (j) The superintendent shall determine total eligible enrollment under
qualifying  group  health  insurance contracts and qualifying individual
health  insurance  contracts.  For  qualifying  group  health  insurance
contracts, the total eligible enrollment shall be determined by dividing
the  total  funds  available  for distribution from the [small] employer
stop loss fund by the estimated per member annual cost of  total  claims
reimbursement  from  the [small] employer stop loss fund. For qualifying
individual health insurance contracts,  the  total  eligible  enrollment
shall  be  determined by dividing the total funds available for distrib-
ution from the qualifying individual stop loss fund by the estimated per
member annual cost of total claims  reimbursement  from  the  qualifying
individual stop loss fund.
  (k)  The  superintendent shall suspend the enrollment of new employers
under qualifying group health insurance contracts if he  OR  SHE  deter-
mines  that  the  total  enrollment  reported  by all health maintenance
organizations, corporations or insurers under such contracts exceeds the
total eligible  enrollment,  thereby  resulting  in  anticipated  annual
expenditures  from  the [small] employer stop loss fund in excess of the
total funds available for distribution from such  stop  loss  fund.  The
superintendent  shall  suspend  the  enrollment of new individuals under
qualifying individual health insurance contracts if he OR SHE determines
that the total enrollment reported by all health  maintenance  organiza-
tions,  corporations,  HEALTH  BENEFIT  FUNDS  or  insurers  under  such
contracts exceeds the total eligible enrollment,  thereby  resulting  in
anticipated annual expenditures from the qualifying individual stop loss
fund  in  excess of the total funds available for distribution from such
stop loss fund.
  (l) The superintendent shall provide the health maintenance  organiza-
tions,  corporations, HEALTH BENEFIT FUNDS or insurers with notification
of any enrollment suspensions as soon as practicable  after  receipt  of
all enrollment data. The superintendent's determination and notification
shall  be  made  separately  for  the  qualifying group health insurance
contracts and for the qualifying individual health insurance contracts.
  (m) If at any point during a suspension of enrollment of new  qualify-
ing  [small] employers and/or qualifying individuals, the superintendent
determines that funds are sufficient to provide for the addition of  new
enrollments,  the  superintendent  shall be authorized to reactivate new
enrollments and to notify all health maintenance  organizations,  corpo-
rations, HEALTH BENEFIT FUNDS or insurers that enrollment of new employ-
ers and/or individuals may again commence. The superintendent's determi-
nation  and  notification  shall  be  made separately for the qualifying
group health insurance  contracts  and  for  the  qualifying  individual
health insurance contracts.
  (n)  The  suspension  of issuance of qualifying group health insurance
contracts to new qualifying [small] employers  shall  not  preclude  the

A. 6390                            12

addition  of  new  employees of an employer already covered under such a
contract or new dependents  of  employees  already  covered  under  such
contracts.
  (o)  The suspension of issuance of qualifying individual health insur-
ance contracts to new qualifying  individuals  shall  not  preclude  the
addition  of  new dependents to an existing qualifying individual health
insurance contract.
  (p) The premiums for qualifying group health insurance contracts  must
factor  in  the  availability of reimbursement from the [small] employer
stop loss fund. The premiums for qualifying individual health  insurance
contracts  must  factor  in  the  availability of reimbursement from the
qualifying individual stop loss funds.
  (q) The superintendent may obtain the services of an  organization  to
administer  the  stop  loss  funds  established  by this section. If the
superintendent deems it appropriate, he or she may  utilize  a  separate
organization  for  administration of the [small] employer stop loss fund
and the qualifying individual stop loss fund. The  superintendent  shall
establish  guidelines  for  the submission of proposals by organizations
for the purposes of administering the funds.  The  superintendent  shall
make a determination whether to approve, disapprove or recommend modifi-
cation  to  the  proposal  of  an  applicant to administer the funds. An
organization approved to administer the funds shall  submit  reports  to
the  superintendent  in such form and at times as may be required by the
superintendent in order to  facilitate  evaluation  and  ensure  orderly
operation  of the funds, including, but not limited to, an annual report
of the affairs and operations of the fund, such report to  be  delivered
to  the superintendent and to the chairs of the senate finance committee
and the assembly ways and means committee. An organization  approved  to
administer  the funds shall maintain records in a form prescribed by the
superintendent and which shall be available for inspection by or at  the
request  of  the  superintendent. The superintendent shall determine the
amount of compensation to be allocated to an  approved  organization  as
payment  for fund administration. Compensation shall be payable from the
stop loss coverage funds. An organization  approved  to  administer  the
funds  may  be  removed  by the superintendent and must cooperate in the
orderly transition of services to another approved  organization  or  to
the superintendent.
  (r) If the superintendent deems it appropriate for the proper adminis-
tration  of  the  [small]  employer stop loss fund and/or the qualifying
individual stop loss fund, the administrator of the fund, on  behalf  of
and  with  the prior approval of the superintendent, shall be authorized
to purchase stop loss insurance and/or  reinsurance  from  an  insurance
company  licensed  to  write  such type of insurance in this state. Such
stop loss insurance and/or reinsurance may be purchased to the extent of
funds available therefor within  such  funds  which  are  available  for
purposes of the stop loss funds established by this section.
  (s)  The  superintendent  may access funding from the [small] employer
stop loss fund and/or the qualifying individual stop loss fund  for  the
purposes  of  developing and implementing public education, outreach and
facilitated enrollment strategies  targeted  to  [small]  employers  and
working adults without health insurance. The superintendent may contract
with  marketing organizations to perform or provide assistance with such
education, outreach, and enrollment strategies. The superintendent shall
determine the amount of funding  available  for  the  purposes  of  this
subsection  which  in  no event shall exceed eight percent of the annual

A. 6390                            13

funding amounts for the [small] employer stop loss fund and the qualify-
ing individual stop loss fund.
  (t)  Brooklyn  healthworks pilot program and upstate healthworks pilot
program. Commencing on July first, two thousand six, the  superintendent
shall  access  funding  from the [small] employer stop loss fund and the
qualifying individual stop loss fund for  the  purpose  of  support  and
expansion of the existing pilot program Brooklyn healthworks approved by
the  superintendent  and  for the establishment and operation of a pilot
program to be located in upstate New  York.  For  the  purpose  of  this
subsection, in no event shall the amount of funding available exceed two
percent of the annual funding amounts for the [small] employer stop loss
fund and the qualifying individual stop loss fund.
  S 3. The superintendent of insurance shall have the power to audit and
provide  for  the  proper expenditure and use of state funds by a health
benefit fund that agrees to participate in the health  benefit  programs
authorized  by  this act.  Such participation shall not subject the plan
to regulation by the superintendent of insurance or the commissioner  of
health  concerning matters under the jurisdiction of the federal depart-
ment of labor pursuant to the Employee Retirement Income Security Act.
  S 4. The superintendent of insurance shall complete a study by July 1,
2010 which shall examine the efficacy of this act in reducing the  large
number  of  uninsured  low wage employees, and in reducing the number of
low wage employees that enroll in the Medicaid and  Family  Health  Plus
programs  as  a  result  of  gaining  access to employer provided health
insurance.  The superintendent may contract with an organization for the
completion of the study.  The study shall be provided to  the  temporary
president of the senate and the speaker of the assembly.
  S  5. Severability.   If any clause, sentence, subdivision, paragraph,
section or part of this act be adjudged by any court of competent juris-
diction to be invalid, such judgment shall not affect, impair or invali-
date the remainder thereof, but shall be confined in  its  operation  to
the  clause,  sentence,  subdivision, paragraph, section or part thereof
directly involved in the controversy in which such judgment  shall  have
been rendered.
  S  6.  This act shall take effect immediately and shall expire July 1,
2010 when upon such date the provisions of  this  act  shall  be  deemed
repealed.