Senate Bill S652

2009-2010 Legislative Session

Provides for the availability of standardized health insurance contracts for all small employers, individual proprietors and qualifying individuals

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Archive: Last Bill Status - In Senate Committee Insurance Committee

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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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to insurance
Jan 12, 2009	referred to insurance

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2009-S652 (ACTIVE) - Details

Current Committee:: Senate Insurance
Law Section:: Insurance Law
Laws Affected:: Add §4326-a, amd §4326, Ins L

2009-S652 (ACTIVE) - Summary

Provides for the availability of standardized health insurance contracts for all small employers and individual proprietors and qualifying individuals, under the new Healthy New York insurance program; provides that there shall be no premium reductions due to stop loss fund subsidies; sets standards for premium rate calculation similar to those for qualifying small employers, qualifying individual proprietors and qualifying individuals.

2009-S652 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S652

 TITLE OF BILL :

An act to amend the insurance law, in relation to providing for
standardized health insurance contracts for all small employers,
individual proprietors and qualifying individuals


 PURPOSE :

To permit sole proprietors and small businesses to purchase the new
Healthy New York insurance product.

 SUMMARY OF PROVISIONS :

Section 1: Creates Insurance Law section 4326-a to permit owners of a
sole proprietorship or a small business to purchase both individual
and family insurance policies for their employees under the new
Healthy New York insurance program. Small businesses that currently
offer insurance benefits to their employees would be eligible to
purchase the new Healthy New York policy without having to quality
under the program as established pursuant to Insurance Law section
4326. Small businesses that purchase Healthy NY pursuant to this new
Insurance Law section 4326-a would, however, not be eligible for the
stop loss subsidies that are available to persons that purchase

Healthy NY pursuant to section 4326.

Section 2: This act shall take effect immediately, provided, however
that policies may be issued pursuant to this law on the first day of
January next succeeding the date on which it shall have become law.

 EXISTING LAW :

Under current law, only qualifying individuals and small businesses
that have not offered health insurance benefits for the past 12 months
to their employees are permitted to purchase the new Healthy NY
insurance policies.

 JUSTIFICATION :

Throughout the State, the cost of providing health insurance is
continuing to increase at a significant rate. Under HCRA II, insurers
and health maintenance organizations (HMOs) were required to offer a
new comprehensive standardized health insurance policy that covered
all necessary medical and hospital care. This policy costs between
5-7% less than most other types of small group coverage because, while
it contains all hospital, surgical, and medical care needed, it does
not include all of the other benefits mandated by the insurance law.

The legislative purpose of Healthy NY is to reduce the cost of health
insurance for small businesses that currently do not after coverage to
their employees by offering a more basic policy and providing for stop
loss reinsurance to reduce an insurer's loss exposure. It is estimated
that the new Healthy NY policies will be approximately 10-15 percent
cheaper than other types of small group coverage. The purpose of this
bill is not to affect in any way the current Healthy NY program which
is attempting to encourage those that do not have insurance to
purchase it. This bill merely allows other small businesses that are
currently purchasing small group policies to purchase this new Healthy
NY basic benefits package policy at an actuarially sustainable rate
without any of the other state subsidies. Even without the stop loss
subsidy, it is estimated that policies issued under this act will be
approximately 5 - 7 percent cheaper than is currently being offered in
the small group market.

The significantly increasing cost of health insurance is a large
problem that is affecting New York's business climate and job
opportunities for its citizens. This problem may not lend itself to
one "large" solution, but can be mitigated by multiple solutions, such
as this bill, that can at least curtail future rate increases.

 LEGISLATIVE HISTORY :
S.2188-A of 2001/2002, S.1374 of 2003/2004, and S.414 of 2005/2006,
S.205-B of 2007/2008

 FISCAL IMPLICATIONS :
There are no fiscal implications because no stop loss subsidies or
other state monies will be used by those purchasing these new
policies. There will be no additional costs to the Insurance
Department because all policy forms for Healthy NY have already been
approved.

 LOCAL FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law, with provisions.

2009-S652 (ACTIVE) - Bill Text download pdf

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

                                   652

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            January 12, 2009
                               ___________

Introduced  by Sens. LARKIN, DeFRANCISCO, FARLEY, LEIBELL, LITTLE, MORA-
  HAN, ROBACH, SALAND, SEWARD, WINNER -- read twice and ordered printed,
  and when printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law, in relation to providing  for  stand-
  ardized health insurance contracts for all small employers, individual
  proprietors and qualifying individuals

  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 4326-a
to read as follows:
  S 4326-A. STANDARDIZED HEALTH INSURANCE CONTRACTS FOR  ALL  INDIVIDUAL
PROPRIETORS,  SMALL  EMPLOYERS  AND QUALIFYING INDIVIDUALS. (A) NOTWITH-
STANDING ANY OTHER PROVISION OF LAW, ALL INDIVIDUAL PROPRIETORS WHO  ARE
THE  ONLY  EMPLOYEE OF A BUSINESS, SMALL EMPLOYERS THAT HAVE BETWEEN TWO
AND FIFTY EMPLOYEES AND QUALIFYING INDIVIDUALS, AS DEFINED IN  PARAGRAPH
THREE   OF  SUBSECTION  (C)  OF  SECTION  FOUR  THOUSAND  THREE  HUNDRED
TWENTY-SIX OF THIS  ARTICLE,  PROVIDED  THAT  THE  QUALIFIED  INDIVIDUAL
RESIDES  IN  A  HOUSEHOLD HAVING A NET HOUSEHOLD INCOME IN EXCESS OF TWO
HUNDRED FIFTY PERCENT OF THE NON-FARM FEDERAL POVERTY  LEVEL,  THAT  ARE
OTHERWISE  NOT  QUALIFIED  TO  PURCHASE  A STANDARDIZED HEALTH INSURANCE
CONTRACT SPECIFIED IN SECTION FOUR THOUSAND THREE HUNDRED TWENTY-SIX  OF
THIS  ARTICLE  SHALL  BE  ELIGIBLE  TO PURCHASE SUCH STANDARDIZED HEALTH
INSURANCE CONTRACTS; PROVIDED, HOWEVER THAT,  SUCH  INDIVIDUAL  PROPRIE-
TORS,  SMALL  EMPLOYERS  AND  QUALIFYING  INDIVIDUALS THAT PURCHASE SUCH
CONTRACTS  SHALL  NOT  DIRECTLY  OR  INDIRECTLY  RECEIVE   ANY   PREMIUM
REDUCTIONS  DUE  TO  STOP  LOSS  FUND SUBSIDIES RECEIVED BY INSURERS AND
HEALTH MAINTENANCE ORGANIZATIONS PURSUANT TO SECTION FOUR THOUSAND THREE
HUNDRED TWENTY-SEVEN OF THIS ARTICLE.
  (B) ALL HEALTH MAINTENANCE ORGANIZATIONS THAT ARE  REQUIRED  TO  OFFER
CONTRACTS  PURSUANT TO SECTION FOUR THOUSAND THREE HUNDRED TWENTY-SIX OF
THIS ARTICLE AND ALL COMPANIES SUBJECT  TO  ARTICLE  FORTY-TWO  OF  THIS

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05231-01-9

S. 652                              2

CHAPTER  AND CORPORATIONS SUBJECT TO THIS ARTICLE THAT VOLUNTARILY OFFER
CONTRACTS PURSUANT TO SUCH SECTION SHALL NOT RECEIVE STOP LOSS FUNDS  OR
REIMBURSEMENTS FOR CLAIMS LOSSES SUSTAINED BY STANDARDIZED HEALTH INSUR-
ANCE  CONTRACTS  ISSUED  TO  INDIVIDUAL PROPRIETORS, SMALL EMPLOYERS AND
QUALIFYING INDIVIDUALS PURSUANT TO THIS SECTION.
  (C) PREMIUM RATE  CALCULATIONS  FOR  CONTRACTS  ISSUED  TO  INDIVIDUAL
PROPRIETORS, SMALL EMPLOYERS AND QUALIFYING INDIVIDUALS PURSUANT TO THIS
SECTION 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 DIFFER-
ENT FAMILY UNITS AND THE RATE TIERS MUST BE UNIFORMLY APPLIED.
  (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
INDIVIDUAL PROPRIETORS, TO SMALL EMPLOYERS AND  TO  QUALIFYING  INDIVID-
UALS.  THE SUPERINTENDENT SHALL NOT REQUIRE THE INCLUSION OF ANY SPECIF-
IC 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 MAINTE-
NANCE ORGANIZATION, CORPORATION OR INSURER'S COMMUNITY RATES.
  (3) CLAIMS EXPERIENCE UNDER CONTRACTS ISSUED  TO  INDIVIDUAL  PROPRIE-
TORS,  TO  SMALL  EMPLOYERS  AND TO QUALIFYING INDIVIDUALS MAY BE POOLED
SEPARATELY FOR RATE SETTING PURPOSES.
  S 2.  Subsection (c) of section 4326 of the insurance law, as added by
chapter 1 of the laws of 1999,  subparagraph  (A)  of  paragraph  1  and
subparagraph (C) of paragraph 3 as amended by chapter 419 of the laws of
2000, is amended to read as follows:
  (c)  The  following  definitions  shall be applicable to the insurance
contracts offered under the program established 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] FIFTY 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

S. 652                              3

thousand  dollars.  The  thirty thousand dollar figure shall be adjusted
periodically pursuant to subparagraph (F) of this paragraph.
  (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 determines that the twelve month period is insufficient  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 proprietor
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. The contract must insure 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;
  (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;
  (iii)  [resides] RESIDING in a household having a net household income
at or below two hundred [eight] FIFTY 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

S. 652                              4

  [(iv)] WHO 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-
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 determines that the twelve month
period is insufficient to prevent inappropriate  substitution  of  other
health  insurance  contracts  for qualifying individual health insurance
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.
  S  3. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become  a  law;  provided  that  the
superintendent  of  insurance  is  authorized  to promulgate any and all
rules and regulations and take any other measures necessary to implement
this act on its effective date on or before such date.

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Senate Bill S652

Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

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co-Sponsors

2009-S652 (ACTIVE) - Details

2009-S652 (ACTIVE) - Summary

2009-S652 (ACTIVE) - Sponsor Memo

2009-S652 (ACTIVE) - Bill Text download pdf

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Sponsored By

Archive: Last Bill Status - In Senate Committee Insurance Committee

Actions

co-Sponsors

2009-S652 (ACTIVE) - Details

2009-S652 (ACTIVE) - Summary

2009-S652 (ACTIVE) - Sponsor Memo

2009-S652 (ACTIVE) - Bill Text download pdf

Comments