S T A T E O F N E W Y O R K
________________________________________________________________________
3413
2011-2012 Regular Sessions
I N A S S E M B L Y
January 25, 2011
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Introduced by M. of A. SCHIMMINGER, TOWNS, SCHROEDER -- Multi-Sponsored
by -- M. of A. GALEF, GUNTHER, HOOPER, KOLB, MAGEE, MILLMAN, SWEENEY,
WRIGHT -- read once and referred to the Committee on Insurance
AN ACT to amend the insurance law, in relation to authorizing the issu-
ance of small business health insurance policies
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 50 to
read as follows:
ARTICLE 50
SMALL BUSINESS HEALTH INSURANCE ACT
SECTION 5001. SHORT TITLE.
5002. STATEMENT OF LEGISLATIVE FINDINGS AND INTENT.
5003. DEFINITIONS.
5004. REQUIREMENTS OF SMALL BUSINESS HEALTH INSURANCE.
5005. CORE BENEFITS.
5006. NOTICE REQUIREMENTS.
5007. REPORTING REQUIREMENTS.
S 5001. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
THE "SMALL BUSINESS HEALTH INSURANCE ACT".
S 5002. STATEMENT OF LEGISLATIVE FINDINGS AND INTENT. THE LEGISLATURE
HEREBY FINDS THAT NEW YORK STATE HAS A SIGNIFICANT NUMBER OF UNINSURED
RESIDENTS.
THE LEGISLATURE FURTHER FINDS THAT ALTHOUGH MANY OF THE WORKING UNIN-
SURED AND THEIR DEPENDENTS ARE FOUND IN SMALL BUSINESSES, THESE FIRMS
ARE INTERESTED IN PROVIDING HEALTH BENEFITS TO THEIR EMPLOYEES BUT ARE
DETERRED BY THE RISING COST OF HEALTH CARE COVERAGE.
THE LEGISLATURE RECOGNIZES THE NEED TO ENABLE AND ENCOURAGE GREATER
NUMBERS OF SMALL EMPLOYERS TO PROVIDE HEALTH CARE COVERAGE TO THEIR
EMPLOYEES.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06181-01-1
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THE LEGISLATURE THEREFORE DECLARES IT TO BE IN THE PUBLIC INTEREST TO
ESTABLISH THE SMALL BUSINESS HEALTH INSURANCE PROGRAM TO HELP REDUCE THE
COSTS OF HEALTH INSURANCE.
S 5003. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE, THE FOLLOWING TERMS
SHALL HAVE THE FOLLOWING MEANINGS:
(A) "SMALL BUSINESS" MEANS ANY BUSINESS WHICH IS RESIDENT IN THIS
STATE, INDEPENDENTLY OWNED AND OPERATED, NOT DOMINANT IN ITS FIELD AND
WHICH EMPLOYS FIFTY OR FEWER EMPLOYEES ON A REGULAR BASIS.
(B) "INSURER" MEANS ANY INSURANCE COMPANY LICENSED TO WRITE HEALTH
INSURANCE IN THIS STATE, INCLUDING CORPORATIONS ORGANIZED UNDER ARTICLE
FORTY-THREE OF THIS CHAPTER AND HEALTH MAINTENANCE ORGANIZATIONS AUTHOR-
IZED PURSUANT TO ARTICLE FORTY-THREE OF THIS CHAPTER OR ARTICLE
FORTY-FOUR OF THE PUBLIC HEALTH LAW.
(C) "SUPERINTENDENT" MEANS THE SUPERINTENDENT OF INSURANCE.
(D) "ELIGIBLE EMPLOYEE" MEANS AN EMPLOYEE OF A SMALL BUSINESS WHO HAS
WORKED NINETY DAYS OR MORE AT AN AVERAGE OF THIRTY-FIVE HOURS OR MORE
PER WEEK. A SMALL BUSINESS MAY, IN ITS SOLE DISCRETION, REDUCE THIS
REQUIREMENT OF AN EMPLOYEE WORKING AN AVERAGE OF THIRTY-FIVE HOURS OR
MORE PER WEEK IN ORDER FOR ADDITIONAL EMPLOYEES TO QUALIFY AS AN ELIGI-
BLE EMPLOYEE. AN ELIGIBLE EMPLOYEE MAY ALSO BE A SOLE PROPRIETOR OR A
PARTNER OF A PARTNERSHIP PROVIDED SUCH SOLE PROPRIETOR OR PARTNER IS
INCLUDED AS AN EMPLOYEE UNDER THE HEALTH CARE PLAN OF THE SMALL BUSI-
NESS.
S 5004. REQUIREMENTS OF SMALL BUSINESS HEALTH INSURANCE. (A) ALL
INSURERS SHALL BE AUTHORIZED TO WRITE SMALL BUSINESS HEALTH INSURANCE
POLICIES FOR QUALIFIED SMALL BUSINESSES TO PROVIDE ONLY SUCH BENEFITS AS
ARE REQUIRED BY SECTION FIVE THOUSAND FIVE OF THIS ARTICLE AND AS MAY
MUTUALLY BE AGREED UPON BETWEEN THE POLICYHOLDER AND THE INSURER. THE
SUPERINTENDENT SHALL ONLY APPROVE A POLICY WHICH MEETS THE FOLLOWING
CRITERIA:
(1) THE POLICY PROVISIONS ARE NOT MISLEADING OR CONFUSING;
(2) THE POLICY CLEARLY STATES THE BENEFITS, LIMITATIONS AND EXCLU-
SIONS;
(3) THE BENEFITS PROVIDED BY THE POLICY MEET THE STANDARDS SPECIFIED
IN THIS SECTION AND SECTION FIVE THOUSAND FIVE OF THIS ARTICLE;
(4) THE PREMIUM RATES ARE REASONABLY RELATED TO THE BENEFITS PROVIDED
AND ARE SUFFICIENT TO SUPPORT THE POLICY;
(5) THE POLICY PROVISIONS INCLUDE CONVERSION AND CONTINUATION RIGHTS
AS DEFINED IN SUBSECTIONS (E), (M) AND (N) OF SECTION THREE THOUSAND TWO
HUNDRED TWENTY-ONE AND SUBSECTIONS (D), (E) AND (G) OF SECTION FOUR
THOUSAND THREE HUNDRED FIVE OF THIS CHAPTER; AND
(6) THE POLICY PROVIDES BOTH INDIVIDUAL AND, IF ELECTED BY THE EMPLOY-
EE, FAMILY COVERAGE. THE POLICY SHALL COVER ALL ELIGIBLE SPOUSES AND
DEPENDENT CHILDREN OF COVERED EMPLOYEES, IN ACCORDANCE WITH POLICY
PARTICIPATION REQUIREMENTS, EXCEPT THAT COVERAGE MAY BE WAIVED FOR
SPOUSES AND DEPENDENT CHILDREN WHO HAVE COVERAGE UNDER ANOTHER HEALTH
PLAN. THE EMPLOYEE SHALL PAY THE ENTIRE PREMIUM COST FOR SUCH DEPENDENT
COVERAGE UNLESS THE EMPLOYER, AT HIS OR HER OPTION, CHOOSES TO CONTRIB-
UTE TO THE EXPENSE OF SUCH ADDITIONAL PREMIUM.
(B) THE PREMIUM FOR A SMALL BUSINESS HEALTH INSURANCE POLICY SHALL BE
PAID BY THE SMALL BUSINESS FROM THE EMPLOYER'S FUNDS, FROM FUNDS
CONTRIBUTED BY THE INSURED EMPLOYEES OR FROM FUNDS CONTRIBUTED JOINTLY
BY THE EMPLOYER AND THE EMPLOYEE.
(C) A SMALL BUSINESS SHALL ONLY BE ELIGIBLE TO PURCHASE SMALL BUSINESS
HEALTH INSURANCE POLICIES ISSUED PURSUANT TO THE PROVISIONS OF THIS
ARTICLE IF SUCH SMALL BUSINESS HAD NOT, WITHIN SIX MONTHS PRECEDING THE
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EFFECTIVE DATE OF THIS ARTICLE, PROVIDED ANY HEALTH BENEFIT COVERAGE TO
ELIGIBLE EMPLOYEES; PROVIDED, HOWEVER, THAT ANY SMALL BUSINESS WHICH DID
PROVIDE ANY SUCH COVERAGE WITHIN THE PRECEDING SIX MONTHS OF THE EFFEC-
TIVE DATE OF THIS ARTICLE, OR WHICH CURRENTLY HAS IN FORCE SUCH COVERAGE
SHALL BECOME ELIGIBLE TO PURCHASE A POLICY ESTABLISHED UNDER THIS ARTI-
CLE TWO YEARS AFTER THE EFFECTIVE DATE OF THIS ARTICLE.
S 5005. CORE BENEFITS. (A) NOTWITHSTANDING ANY PROVISION OF LAW TO THE
CONTRARY, SMALL BUSINESS HEALTH INSURANCE POLICIES ISSUED PURSUANT TO
THIS ARTICLE SHALL NOT BE SUBJECT TO ANY OTHER MANDATED COVERAGES OR
SERVICES, EXCEPT FOR:
(1) MATERNITY CARE, AS DEFINED IN PARAGRAPH FIVE OF SUBSECTION (K) OF
SECTION THREE THOUSAND TWO HUNDRED TWENTY-ONE AND SUBSECTION (C) OF
SECTION FOUR THOUSAND THREE HUNDRED THREE OF THIS CHAPTER;
(2) NEWBORN CARE, AS DEFINED IN PARAGRAPH TWO OF SUBSECTION (F) OF
SECTION FOUR THOUSAND TWO HUNDRED THIRTY-FIVE AND PARAGRAPH ONE OF
SUBSECTION (C) OF SECTION FOUR THOUSAND THREE HUNDRED FIVE OF THIS CHAP-
TER;
(3) EMERGENCY MEDICAL SERVICES, AS DEFINED IN PARAGRAPH FOUR OF
SUBSECTION (K) OF SECTION THREE THOUSAND TWO HUNDRED TWENTY-ONE AND
PARAGRAPH TWO OF SUBSECTION (A) OF SECTION FOUR THOUSAND THREE HUNDRED
THREE OF THIS CHAPTER; AND
(4) MAMMOGRAPHY SCREENING, AS DEFINED IN SUBPARAGRAPH (C) OF PARAGRAPH
ELEVEN OF SUBSECTION (L) OF SECTION THREE THOUSAND TWO HUNDRED
TWENTY-ONE AND PARAGRAPH THREE OF SUBSECTION (P) OF SECTION FOUR THOU-
SAND THREE HUNDRED THREE OF THIS CHAPTER.
(B) A SMALL BUSINESS HEALTH INSURANCE POLICY ISSUED PURSUANT TO THIS
ARTICLE SHALL PROVIDE COVERAGE FOR AMBULATORY CARE AND FOR INPATIENT AND
OUTPATIENT ACUTE MEDICAL AND SURGICAL CARE. THE HOSPITAL AND MEDICAL
SERVICES TO BE COVERED SHALL INCLUDE, BUT NOT BE LIMITED TO:
(1) NO LESS THAN THIRTY DAYS HOSPITAL CONFINEMENT;
(2) DEDUCTIBLE AND CO-PAYMENT AMOUNTS WHICH MAY BE GREATER THAN THOSE
SPECIFIED IN THE DEPARTMENT REGULATIONS, PROVIDED THAT NO ANNUAL DEDUCT-
IBLE FOR AN INDIVIDUAL SHALL EXCEED ONE THOUSAND TWO HUNDRED DOLLARS,
AND NO ANNUAL DEDUCTIBLE FOR A FAMILY SHALL EXCEED TWO THOUSAND DOLLARS;
AND
(3) NO FEWER THAN SIX PHYSICIAN OFFICE VISITS PER YEAR.
(C) A SMALL BUSINESS HEALTH INSURANCE POLICY ISSUED PURSUANT TO THIS
ARTICLE MAY INCLUDE LIMITATIONS ON BENEFITS GREATER THAN THOSE SPECIFIED
IN THE DEPARTMENT REGULATIONS AND MAY INCLUDE PROVISIONS DESIGNED TO
CONTROL POLICY COSTS AND ENCOURAGE COST EFFECTIVE UTILIZATION OF
MEDICALLY NECESSARY HEALTH CARE SERVICES. SUCH PROVISIONS MAY INCLUDE,
BUT NEED NOT BE LIMITED TO:
(1) PREVENTIVE CARE SERVICES;
(2) PRIOR APPROVAL OF ELECTIVE HOSPITAL ADMISSIONS;
(3) SECOND SURGICAL OPINIONS;
(4) UTILIZATION REVIEW OF HEALTH CARE SERVICES;
(5) USE OF A PREFERRED PROVIDER PLAN, WHICH: (I) LIMITS THE PAYMENT OF
THE BENEFITS TO PROVIDERS OF SERVICES WHO HAVE SIGNED AN AGREEMENT WITH
THE INSURER, OR ANY INTERMEDIARY ORGANIZATION REPRESENTING THOSE PROVID-
ERS IN NEGOTIATIONS WITH THE INSURER, REGARDING THE AMOUNT OF SUCH
PAYMENTS, OR (II) OFFERS DIFFERENT BENEFITS TO THE PERSON COVERED WHEN
PROCURED THROUGH SUCH ORGANIZATION;
(6) PRE-ADMISSION TESTING; AND
(7) ANNUAL AND LIFETIME BENEFIT MAXIMUMS AS DETERMINED BY THE INSURER
AND THE SMALL BUSINESS.
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(D) A SMALL BUSINESS MAY SELECT COVERAGE FOR ADDITIONAL BENEFITS,
INCLUDING BUT NOT LIMITED TO OPTICAL AND DENTAL CARE, FOR ALL ELIGIBLE
EMPLOYEES AND DEPENDENTS, IF AVAILABLE FROM THE INSURER. THE PROVISIONS
OF SUBSECTION (B) OF THIS SECTION MAY, AT THE OPTION OF THE INSURER, BE
APPLIED TO ANY ADDITIONAL BENEFITS FOR WHICH COVERAGE IS PROVIDED.
S 5006. NOTICE REQUIREMENTS. POLICIES APPROVED FOR USE PURSUANT TO
THIS ARTICLE SHALL HAVE PROMINENTLY STAMPED ON THE FACE OF EACH POLICY
AND CERTIFICATE THE FOLLOWING NOTICE: "THIS IS A SMALL BUSINESS LIMITED
BENEFITS HEALTH INSURANCE POLICY AS APPROVED BY THE NEW YORK STATE
INSURANCE DEPARTMENT."
S 5007. REPORTING REQUIREMENTS. THE SUPERINTENDENT MAY ISSUE REGU-
LATIONS TO FACILITATE DATA COLLECTION CONCERNING THE POLICIES ISSUED
PURSUANT TO THIS ARTICLE AND SHALL REPORT ANNUALLY TO THE LEGISLATURE ON
THE PROGRESS OF POLICIES ISSUED PURSUANT TO THIS ARTICLE.
S 2. This act shall take effect on the forty-fifth day after it shall
have become a law.