senate Bill S4526B

Signed By Governor
2013-2014 Legislative Session

Creates the freelancers health plan demonstration program

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Sponsored By

Archive: Last Bill Status Via A6519 - Signed by Governor


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jul 31, 2013 signed chap.203
Jul 19, 2013 delivered to governor
Jun 20, 2013 returned to assembly
passed senate
3rd reading cal.1559
substituted for s4526b
Jun 20, 2013 substituted by a6519b
ordered to third reading cal.1559
committee discharged and committed to rules
Jun 12, 2013 print number 4526b
amend and recommit to insurance
Jun 11, 2013 print number 4526a
amend (t) and recommit to insurance
Apr 08, 2013 referred to insurance

Votes

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Bill Amendments

Original
A
B (Active)
Original
A
B (Active)

Co-Sponsors

S4526 - Bill Details

See Assembly Version of this Bill:
A6519B
Law Section:
Insurance Law
Laws Affected:
Add §1125, amd §§4237-a & 1108, Ins L

S4526 - Bill Texts

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Creates the freelancers health plan demonstration program; provides that such program would be a self-funded plan maintained by an association for the purpose of providing medical, surgical, or hospital services to independent workers; provides for an expiration of December 31, 2014.

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BILL NUMBER:S4526

TITLE OF BILL: An act to amend the insurance law, in relation to
creating the freelancers health plan demonstration program; and
providing for the repeal of such provision upon expiration thereof

Purpose Or General Idea Of Bill: The purpose of this bill is to allow
a Freelancers Union to self-fund its health insurance plan.

Summary Of Specific Provisions: This bill would allow a Freela ncers
Union to self-fund its health insurance plans (plan). Any plan
established under this bill would be required to offer the same
mandated benefits as a non-profit health insurer established pursuant
to article 43 of the Insurance Law, including the essential health
benefits mandated by the federal Affordable Care Act. Such plans would
also be required to maintain an eighty-two percent medical loss ratio.

In order to establish a plan, the Union would be required to obtain a
demonstration program waiver from the Superintendent of Financial
Services, establish and maintain a fair and equitable appeals process
subject to the laws relating to utilization review and external appeal
in article 49 of the Insurance Law, file all documents related to the
plan and certain financial reports with the Superintendent, and meet
minimum reserve requirements.

The bill would allow the Superintendent to conduct an examination into
a health plan pursuant to article 3 of the Insurance Law and the
Financial Services Law and the Superintendent could suspend or revoke
the waiver if the Superintendent finds that the Union has violated any
of the provisions of this bill. In addition, the bill would subject
the Union to the penalties established pursuant to section 109 of the
Insurance Law should the Union violate the provisions of this bill.

If a health insurance plan is to be terminated, the Union would be
required to submit to the Superintendent for approval a plan for
winding up the plan's affairs at least sixty clays prior to the
termination of the plan.

This bill would sunset on December 31, 2014.

Justification: Today, one-third of all working Americans are
temporary, part-time, freelance, or self-employed. These part-time,
temporary and independent workers frequently lack access to
employment-based group health insurance coverage and often cannot
afford to purchase coverage in the private pay market. In 2009, New
York State created a demonstration program that allowed the
Freelancers Union to provide health insurance solely to its members.
Currently, approximately 25,000 Union members and their dependents
receive affordable health insurance through the Union.

In 2010, President Obama signed the Affordable Care Act (ACA), a
landmark piece of legislation that increased access to and the quality
of health insurance in the United States. Effective January 1, 2014,
the ACA will require health insurers participating in the individual
and small group markets within a state to offer insurance to all
individuals or groups within that state. The ACA did not include an
exemption for unique health insurance programs such as the one offered


by the Freelancers Union. As a result, the Union will be required to
offer its health insurance plans on the open market. This will violate
the Union's commitment to its funders, reduce the Union's ability to
offer innovating plan designs that meet the unique needs of
freelancers living on modest incomes, and require the Union to
increase its reserve requirements, resulting in an increase in
premiums.

President Obama has stated that under the Affordable Care Act, those
who are happy with their health insurance will be able to keep it. By
self-funding its health insurance plan, the Freelancers Union will be
able to preserve its social mission of making quality, affordable,
portable coverage available to independent workers living on modest
incomes.

Prior Legislative History: New bill.

Fiscal Implications For State And Local Governments: None

Effective Date: Immediately and shall expire and be deemed repealed
on December 31, 2014.

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

                                  4526

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              April 8, 2013
                               ___________

Introduced  by  Sens.  HANNON, SAVINO, BRESLIN -- read twice and ordered
  printed, and when printed to be committed to the Committee  on  Insur-
  ance

AN ACT to amend the insurance law, in relation to creating the freelanc-
  ers health plan demonstration program; and providing for the repeal of
  such provision upon expiration thereof

  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  1125
to read as follows:
  S  1125.  FREELANCERS  HEALTH  PLAN  DEMONSTRATION  PROGRAM.   (A) FOR
PURPOSES OF THIS SECTION:
  (1) "FREELANCERS ASSOCIATION" MEANS AN ENTITY THAT: (A) IS EXEMPT FROM
FEDERAL TAXATION UNDER SECTION  501(C)(3)  OR  (C)(4)  OF  THE  INTERNAL
REVENUE CODE; AND (B) PRIOR TO JANUARY FIRST, TWO THOUSAND THIRTEEN, HAS
BEEN  ISSUED  ONE  OR MORE HEALTH INSURANCE POLICIES BY AN INSURER UNDER
SECTION ONE THOUSAND ONE HUNDRED TWENTY-THREE OF THIS ARTICLE.
  (2) "FREELANCERS HEALTH PLAN" OR "PLAN"    MEANS  A  SELF-FUNDED  PLAN
MAINTAINED  BY  A  FREELANCERS  ASSOCIATION FOR THE PURPOSE OF PROVIDING
MEDICAL, SURGICAL, OR HOSPITAL SERVICES TO INDEPENDENT WORKERS  WHO  ARE
MEMBERS  OF  THE FREELANCERS ASSOCIATION AND A MEMBER'S SPOUSE, DOMESTIC
PARTNER AND DEPENDENTS.
  (3) "INDEPENDENT WORKER" MEANS AN INDIVIDUAL WHO: (A) IS AN  INDEPEND-
ENT  CONTRACTOR;  (B) IS SELF-EMPLOYED; (C) WORKS PART-TIME; (D) OBTAINS
TEMPORARY WORK THROUGH AN EMPLOYMENT AGENCY; (E) PERFORMS TEMPORARY WORK
FOR TWO OR MORE EMPLOYERS SIMULTANEOUSLY; (F) IS A DOMESTIC  CHILD  CARE
WORKER;  OR  (G)  IS HIRED TO WORK FULL-TIME FOR A SINGLE EMPLOYER FOR A
PERIOD NOT TO EXCEED EIGHTEEN MONTHS IF SUCH  EMPLOYER  DOES  NOT  OFFER
GROUP  HEALTH  INSURANCE  TO EMPLOYEES EMPLOYED ON A TEMPORARY BASIS. AN
INDIVIDUAL IS NOT AN  INDEPENDENT  WORKER  IF  HE  OR  SHE  IS  EMPLOYED
FULL-TIME  BY A SINGLE EMPLOYER, WITH THE EXCEPTION OF AN INDIVIDUAL WHO

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10111-02-3

S. 4526                             2

MEETS THE REQUIREMENTS OF SUBPARAGRAPH (D), (F) OR  (G)  OF  THIS  PARA-
GRAPH.
  (4) "MEMBER CONTRACT" MEANS EVIDENCE OF COVERAGE FURNISHED TO AN INDE-
PENDENT  WORKER  WHO  IS A MEMBER OF A FREELANCERS ASSOCIATION THAT SETS
FORTH ALL BENEFITS AND TERMS AND CONDITIONS WITH REGARD TO A FREELANCERS
HEALTH PLAN.
  (5) "QUALIFIED ACTUARY" MEANS AN ACTUARY  WHO  IS  A  MEMBER  IN  GOOD
STANDING  OF  THE AMERICAN ACADEMY OF ACTUARIES OR SOCIETY OF ACTUARIES,
WITH EXPEDIENCE IN ESTABLISHING RATES FOR SELF-INSURED TRUSTS  PROVIDING
HEALTH BENEFITS OR OTHER SIMILAR EXPERIENCE.
  (B) A FREELANCERS ASSOCIATION SHALL NOT ESTABLISH, MAINTAIN, OR OTHER-
WISE  PARTICIPATE  IN  A  FREELANCERS HEALTH PLAN UNLESS THE FREELANCERS
ASSOCIATION OBTAINS AND MAINTAINS A DEMONSTRATION  PROGRAM  WAIVER  FROM
THE SUPERINTENDENT PURSUANT TO THE PROVISIONS OF THIS SECTION.
  (C)  EXCEPT  AS  OTHERWISE  PROVIDED  IN  THIS SECTION OR A REGULATION
PROMULGATED BY THE SUPERINTENDENT, A FREELANCERS ASSOCIATION OPERATING A
FREELANCERS HEALTH PLAN SHALL:
  (1) PROVIDE ALL MANDATED BENEFITS THAT  CORPORATIONS  ORGANIZED  UNDER
ARTICLE FORTY-THREE OF THIS CHAPTER ARE REQUIRED TO PROVIDE; AND
  (2) PROVIDE THAT ITS PLAN WILL HAVE AN EXPECTED LOSS RATIO OF NOT LESS
THAN  EIGHTY-TWO PERCENT. IN REVIEWING A RATE FILING OR APPLICATION BY A
PLAN, THE SUPERINTENDENT MAY  MODIFY  THE  EIGHTY-TWO  PERCENT  EXPECTED
MINIMUM  LOSS  RATIO  REQUIREMENT  IF  THE SUPERINTENDENT DETERMINES THE
MODIFICATION TO BE IN THE INTERESTS OF THE PEOPLE OF THIS  STATE  OR  IF
THE  SUPERINTENDENT DETERMINES THAT A MODIFICATION IS NECESSARY TO MAIN-
TAIN PLAN SOLVENCY. NO LATER THAN ONE  HUNDRED  TWENTY  DAYS  AFTER  THE
CLOSE  OF  A PLAN'S FISCAL YEAR, A PLAN SHALL ANNUALLY REPORT THE ACTUAL
LOSS RATIO FOR THE PREVIOUS PLAN FISCAL YEAR IN A FORMAT  ACCEPTABLE  TO
THE  SUPERINTENDENT.  IF  THE EXPECTED LOSS RATIO IS NOT MET, THE SUPER-
INTENDENT MAY DIRECT THE PLAN TO TAKE CORRECTIVE ACTION.
  (D) A FREELANCERS ASSOCIATION SHALL FILE AN APPLICATION FOR  A  DEMON-
STRATION   PROGRAM  WAIVER  ON  SUCH  FORM  AS  THE  SUPERINTENDENT  MAY
PRESCRIBE, AND SHALL PROVIDE TO THE SATISFACTION OF  THE  SUPERINTENDENT
THE FOLLOWING:
  (1)  A  COPY  OF THE MEMBER CONTRACT, INCLUDING A TABLE OF THE PREMIUM
RATES CHARGED OR PROPOSED TO BE CHARGED;
  (2) A REPORT INDICATING THE BENEFIT  PROVISIONS,  PREMIUM  RATES,  AND
INCURRED  MEDICAL  LOSSES  ASSOCIATED WITH THE FREELANCERS ASSOCIATION'S
MEMBERS UNDER THE INSURANCE POLICIES INSURING  THE  FREELANCERS  ASSOCI-
ATION'S   MEMBERS   PURSUANT   TO   SECTION  ONE  THOUSAND  ONE  HUNDRED
TWENTY-THREE OF THIS ARTICLE FOR THE THREE YEARS PRIOR TO  THE  DATE  OF
THE APPLICATION;
  (3)  THE  MOST RECENT CERTIFIED INDEPENDENTLY-AUDITED FINANCIAL STATE-
MENT FOR THE FREELANCERS ASSOCIATION;
  (4) A REPORT  PREPARED  BY  A  QUALIFIED  ACTUARY  THAT  SUPPORTS  THE
PROPOSED PREMIUMS FOR THE PLAN;
  (5)  A  COPY OF ALL AGREEMENTS BETWEEN THE FREELANCERS ASSOCIATION AND
ANY PLAN ADMINISTRATOR, WITH REGARD TO THE FREELANCERS HEALTH PLAN;
  (6) A PRO-FORMA BALANCE SHEET, INCLUDING ACTUARIALLY DETERMINED CLAIMS
LIABILITIES, AND STATEMENT OF REVENUE AND EXPENSES, INCLUDING REASONABLY
PROJECTED EXPENSES, MEDICAL  LOSSES,  AND  PREMIUMS  TO  BE  CHARGED  TO
MEMBERS OF THE PLAN DURING THE FIRST THREE YEARS;
  (7) A NARRATIVE DESCRIPTION OF THE:
  (A)  ACCOUNTING  METHODOLOGY  THAT  THE  FREELANCERS  ASSOCIATION WILL
UTILIZE, INCLUDING A DESCRIPTION OF THE SEPARATE ACCOUNTS  FOR  REVENUES
AND EXPENSES, INCLUDING MEDICAL AND HOSPITAL EXPENSES AND ADMINISTRATION

S. 4526                             3

EXPENSES,  RESERVES FOR CLAIMS AND EXPENSES THEREON, INCLUDING INCURRED-
BUT-NOT-REPORTED, UNEARNED PREMIUM RESERVES,  CONTINGENT  RESERVES,  AND
ANY  ASSET ACCOUNTS (CASH, PREMIUMS RECEIVABLE, INVESTMENTS) RELEVANT TO
THE PLAN. THE ACCOUNTS MAY BE ESTABLISHED WITHIN THE FREELANCERS ASSOCI-
ATION'S  GENERAL  ACCOUNTING  LEDGER SYSTEM, PROVIDED THE GENERAL LEDGER
ACCOUNTS ARE CLEARLY IDENTIFIABLE AS PERTAINING TO THE  PLAN,  INCLUDING
ANY SUCH ACCOUNTS ALLOCATED TO THE PLAN;
  (B)  BILLING  AND  CLAIM  PAYMENT  PROCEDURES, INCLUDING THE NAMES AND
CONTACT INFORMATION FOR THOSE PERSONS CHARGED WITH  HANDLING  ACCOUNTING
AND CLAIMS ISSUES; AND
  (C)  ANY  COMPENSATION  THE  FREELANCERS  ASSOCIATION  WILL RECEIVE IN
CONNECTION WITH THE PLAN.
  (8) A COPY OF ANY STOP-LOSS INSURANCE POLICY ISSUED OR PROPOSED TO  BE
ISSUED  BY  AN  INSURER  AUTHORIZED  TO  DO THE BUSINESS OF ACCIDENT AND
HEALTH INSURANCE IN THIS STATE OR IS A HEALTH SERVICE CORPORATION ORGAN-
IZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; AND
  (9) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  (E) UPON COMPLIANCE WITH THIS SECTION, THE SUPERINTENDENT SHALL  ISSUE
A DEMONSTRATION PROGRAM WAIVER TO AN APPLICANT. IF A FREELANCERS ASSOCI-
ATION  SUBMITS A MATERIALLY SATISFACTORY AND COMPLETE APPLICATION WITHIN
SIXTY DAYS OF THE EFFECTIVE DATE OF  THIS  SECTION,  THE  SUPERINTENDENT
SHALL  ISSUE  THE FREELANCERS ASSOCIATION A DEMONSTRATION PROGRAM WAIVER
THAT IS EFFECTIVE ON OR BEFORE JANUARY  FIRST,  TWO  THOUSAND  FOURTEEN.
EVERY  DEMONSTRATION PROGRAM WAIVER SHALL CONTAIN THE NAME OF THE CERTI-
FIED ENTITY AND ITS HOME OFFICE ADDRESS. THE SUPERINTENDENT SHALL REFUSE
TO GRANT A DEMONSTRATION PROGRAM WAIVER TO AN APPLICANT  THAT  FAILS  TO
MEET  THE  REQUIREMENTS  OF  THIS SECTION. NOTICE OF REFUSAL SHALL BE IN
WRITING AND SHALL  SET FORTH THE BASIS FOR  REFUSAL.  IF  THE  APPLICANT
SUBMITS A WRITTEN REQUEST WITHIN THIRTY DAYS AFTER RECEIPT OF THE NOTICE
OF  REFUSAL, THEN THE SUPERINTENDENT SHALL CONDUCT A HEARING TO GIVE THE
APPLICANT THE OPPORTUNITY TO SHOW CAUSE WHY THE REFUSAL  SHOULD  NOT  BE
MADE FINAL.
  (F)  IN ORDER TO OBTAIN AND MAINTAIN A DEMONSTRATION PROGRAM WAIVER, A
FREELANCERS ASSOCIATION SHALL:
  (1) FILE A COMPLETE APPLICATION WITH THE SUPERINTENDENT IN  ACCORDANCE
WITH SUBSECTION (D) OF THIS SECTION;
  (2)  HAVE WITHIN ITS OWN ORGANIZATION ADEQUATE RESOURCES AND COMPETENT
PERSONNEL TO ADMINISTER THE FREELANCERS HEALTH  PLAN  OR,  IN  ORDER  TO
PROVIDE  SUCH  ADMINISTRATIVE SERVICES, IN WHOLE OR PART, HAS CONTRACTED
WITH A PERSON OR ENTITY TO SERVE AS A PLAN ADMINISTRATOR, DETERMINED  BY
THE  FREELANCERS ASSOCIATION TO BE QUALIFIED BASED UPON WRITTEN DOCUMEN-
TATION FURNISHED TO  THE  FREELANCERS  ASSOCIATION,  PROVIDED  THAT  THE
DOCUMENTATION  SHALL  BE  MADE  AVAILABLE  TO  THE  SUPERINTENDENT  UPON
REQUEST;
  (3) ESTABLISH AND  MAINTAIN  PREMIUM  RATES  SUFFICIENT  TO  MEET  ITS
CONTRACTUAL  OBLIGATIONS  AND  TO  SATISFY  THE RESERVE REQUIREMENTS SET
FORTH IN SUBSECTION (H) OF THIS SECTION;
  (4) ESTABLISH AND MAINTAIN A FAIR AND  EQUITABLE  PROCESS  FOR  CLAIMS
REVIEW, DISPUTE RESOLUTION, AND APPEAL PROCEDURES, INCLUDING ARBITRATION
OF  REJECTED  CLAIMS, AND PROCEDURES FOR HANDLING CLAIMS FOR BENEFITS IN
THE EVENT OF PLAN DISSOLUTION, THAT ARE SATISFACTORY TO THE  SUPERINTEN-
DENT AND ARE SUBJECT TO ARTICLE FORTY-NINE OF THIS CHAPTER;
  (5) PROVIDE MEMBERS WITH A MEMBER CONTRACT; AND
  (6) FILE ALL PLAN DOCUMENTS AND ANY AMENDMENTS THERETO WITH THE SUPER-
INTENDENT  AND  RECEIVE THE SUPERINTENDENT'S APPROVAL IN ACCORDANCE WITH
THIS SECTION.

S. 4526                             4

  (G) A  FREELANCERS  ASSOCIATION  THAT  HAS  RECEIVED  A  DEMONSTRATION
PROGRAM  WAIVER  SHALL FILE WITH THE SUPERINTENDENT, FOR THE SUPERINTEN-
DENT'S PRIOR APPROVAL, ANY AMENDMENTS TO THE MEMBER CONTRACT,  FREELANC-
ERS HEALTH PLAN, OR PREMIUM RATES CHARGED FOR THE PLAN.
  (H)(1)  A  FREELANCERS  ASSOCIATION  SHALL ESTABLISH RESERVES WITH THE
AMOUNTS NECESSARY TO SATISFY ALL CONTRACTUAL OBLIGATIONS AND LIABILITIES
OF THE PLAN, INCLUDING: (A) A RESERVE FOR PAYMENT OF CLAIMS AND EXPENSES
THEREON REPORTED BUT NOT YET  PAID,  AND  CLAIMS  AND  EXPENSES  THEREON
INCURRED  BUT  NOT  YET REPORTED, WHICH SHALL NOT BE LESS THAN AN AMOUNT
EQUAL TO TWELVE AND ONE-HALF PERCENT OF  EXPECTED  INCURRED  CLAIMS  AND
EXPENSES  THEREON  FOR THE CURRENT PLAN YEAR, UNLESS A QUALIFIED ACTUARY
HAS DEMONSTRATED TO THE  SUPERINTENDENT'S  SATISFACTION  THAT  A  LESSER
AMOUNT  SHALL  BE  ADEQUATE;  (B)  A RESERVE FOR UNEARNED PREMIUM EQUIV-
ALENTS, COMPUTED PRO-RATA ON THE BASIS OF THE UNEXPIRED PORTION  OF  THE
POLICY  PERIOD; AND (C) A CONTINGENT RESERVE FUND, ESTABLISHED AND MAIN-
TAINED FOR THE SOLE PURPOSE OF SATISFYING UNEXPECTED OBLIGATIONS OF  THE
PLAN  IN  THE  EVENT  OF THE TERMINATION OF THE PLAN, WHICH SHALL NOT BE
LESS THAN FIVE PERCENT OF  THE  ANNUALIZED  EARNED  PREMIUM  EQUIVALENTS
DURING THE CURRENT FISCAL YEAR OF THE PLAN.
  (2)  A  QUALIFIED  ACTUARY  MAY  DEMONSTRATE THAT A LESSER AMOUNT OF A
RESERVE FOR PAYMENT OF CLAIMS AND EXPENSES THEREON REPORTED BUT NOT  YET
PAID,  AND  CLAIMS  AND  EXPENSES THEREON INCURRED-BUT-NOT-YET-REPORTED,
SHALL BE ADEQUATE  BY  SHOWING  THAT  THE  FREELANCERS  ASSOCIATION  HAS
OBTAINED  A  MEDICAL  STOP-LOSS  INSURANCE  POLICY  ISSUED BY AN INSURER
AUTHORIZED BY THE SUPERINTENDENT TO DO  THE  BUSINESS  OF  ACCIDENT  AND
HEALTH INSURANCE IN THIS STATE OR IS A HEALTH SERVICE CORPORATION ORGAN-
IZED  UNDER  ARTICLE  FORTY-THREE  OF  THIS  CHAPTER. IF AT ANY TIME THE
RESERVE FUNDS REQUIRED TO BE ESTABLISHED PURSUANT TO THIS  SECTION  FALL
BELOW  THE  REQUIRED  MINIMUM  AMOUNTS, THEN THE FREELANCERS ASSOCIATION
SHALL IMMEDIATELY NOTIFY THE  SUPERINTENDENT  OF  SUCH  IMPAIRMENT.  THE
FREELANCERS  ASSOCIATION  SHALL CURE THE IMPAIRMENT WITHIN FIVE BUSINESS
DAYS.
  (3) THE ASSETS CONSTITUTING THE FREELANCERS HEALTH  PLAN'S  CONTINGENT
RESERVE FUND SHALL CONSIST SOLELY OF CERTIFICATES OF DEPOSIT ISSUED BY A
UNITED STATES BANK AND PAYABLE IN UNITED STATES LEGAL TENDER, OR SECURI-
TIES  REPRESENTING INVESTMENTS OF THE TYPES SPECIFIED IN PARAGRAPHS ONE,
TWO, THREE, EIGHT, AND TEN OF SUBSECTION (A)  OF  SECTION  ONE  THOUSAND
FOUR  HUNDRED  FOUR OF THIS CHAPTER, OR AS OTHERWISE EXPRESSLY PERMITTED
BY THE SUPERINTENDENT. ANY INTEREST EARNED OR CAPITAL GAIN  REALIZED  ON
THE  MONEY  SO  DEPOSITED OR INVESTED SHALL ACCRUE TO AND BECOME PART OF
THE PLAN'S RESERVE FUNDS OR CONTINGENT RESERVE, AS APPLICABLE.
  (4) THE PLAN'S ASSETS,  LIABILITIES,  INCOME  AND  EXPENSES  SHALL  BE
ACCOUNTED  FOR  SEPARATE  AND  APART FROM ALL OTHER ASSETS, LIABILITIES,
INCOME AND EXPENSES OF THE FREELANCERS ASSOCIATION. THE  ACCOUNTING  FOR
THE  PLAN'S CONTINGENT RESERVE FUND SHALL SHOW: (A) THE PURPOSE, SOURCE,
DATE AND AMOUNT OF EACH SUM PAID INTO THE FUND; (B) THE INTEREST  EARNED
BY  SUCH  FUND;  (C)  CAPITAL GAINS OR LOSSES RESULTING FROM THE SALE OF
INVESTMENTS OF THE  PLAN'S  CONTINGENT  RESERVE  FUND;  (D)  THE  ORDER,
PURPOSE,  DATE  AND  AMOUNT  OF EACH PAYMENT FROM THE CONTINGENT RESERVE
FUND; AND (E) THE ASSETS OF THE CONTINGENT RESERVE FUND, INDICATING CASH
BALANCE AND SCHEDULE OF INVESTMENTS.
  (5) THE REQUIREMENTS FOR FUNDING  OF  THE  PLAN'S  RESERVES  SHALL  BE
CALCULATED  USING  GENERALLY  ACCEPTED ACCOUNTING PRINCIPLES. ONLY THOSE
EXPENSES THAT RELATE TO THE PLAN SHALL BE INCLUDED  IN  CALCULATING  THE
REQUIREMENTS FOR FUNDING OF THE PLAN'S RESERVE FUNDS. EXPENSES ALLOCATED
TO  THE PLAN SHALL BE ALLOCATED ON AN EQUITABLE BASIS IN CONFORMITY WITH

S. 4526                             5

GENERALLY  ACCEPTED  ACCOUNTING  PRINCIPLES  CONSISTENTLY  APPLIED.  THE
BOOKS,  ACCOUNTS,  AND  RECORDS  OF  THE  PLAN SHALL BE MAINTAINED AS TO
CLEARLY AND ACCURATELY DISCLOSE THE NATURE AND DETAILS OF  ALL  EXPENSES
SO AS TO SUPPORT THE REASONABLENESS OF SUCH EXPENSES.
  (I)  (1)  A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT
WITHIN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF THE PLAN'S FISCAL YEAR  A
REPORT THAT CONTAINS:
  (A)  AN  ANNUAL  FINANCIAL STATEMENT, VERIFIED BY THE OATH OF AT LEAST
TWO OF THE FREELANCERS ASSOCIATION'S  PRINCIPAL  OFFICERS,  WITH  DIRECT
KNOWLEDGE  OF THE OPERATIONS OF THE FREELANCERS HEALTH PLAN, SHOWING THE
FINANCIAL CONDITION OF THE PLAN DURING THE MOST RECENT FISCAL  YEAR,  IN
ACCORDANCE  WITH  LAW AND GENERALLY ACCEPTED ACCOUNTING PRINCIPLES, IN A
FORM PRESCRIBED BY THE SUPERINTENDENT;
  (B) THE IDENTITY OF THE QUALIFIED ACTUARY UTILIZED BY THE  FREELANCERS
ASSOCIATION  OR PLAN AND THE AMOUNT PAID TO THE QUALIFIED ACTUARY BY THE
FREELANCERS ASSOCIATION OR PLAN DURING ITS MOST RECENT FISCAL YEAR;
  (C) THE IDENTITIES OF THE PLAN'S TEN LARGEST VENDORS BY PAYMENT AMOUNT
DURING ITS MOST RECENT FISCAL YEAR;
  (D) THE NAME AND CONTACT INFORMATION OF THE PERSON OR ENTITY APPOINTED
BY THE FREELANCERS ASSOCIATION  TO  ADMINISTER  THE  FREELANCERS  HEALTH
PLAN;
  (E) A PRO-FORMA STATEMENT OF PROJECTED REVENUE AND EXPENSES FOR HEALTH
BENEFITS ANTICIPATED BY THE PLAN FOR THE NEXT TWELVE-MONTH PERIOD OF THE
PLAN'S OPERATION, PROVIDED ON A FISCAL YEAR;
  (F)  A  DETAILED  REPORT OF THE OPERATIONS AND CONDITION OF THE PLAN'S
RESERVE FUNDS; AND
  (G) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  (2) A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT WITH-
IN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF ITS FREELANCERS HEALTH PLAN'S
FISCAL YEAR THE MOST RECENT CERTIFIED, INDEPENDENTLY  AUDITED  FINANCIAL
STATEMENT  FOR  THE FREELANCERS ASSOCIATION. THE STATEMENT SHALL INCLUDE
AN OPINION OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. THE  NOTES  TO
THE  FINANCIAL  STATEMENT  SHALL SHOW THE FINANCIAL RESULTS OF THE FREE-
LANCERS HEALTH PLAN OPERATIONS AND A DESCRIPTION AS TO HOW THE FREELANC-
ERS ASSOCIATION MEETS THE  RESERVE  REQUIREMENTS  IN  PARAGRAPH  ONE  OF
SUBSECTION  (H) OF THIS SECTION, INCLUDING THE AMOUNTS REPORTED FOR EACH
OF THE RESERVES, THE METHOD USED TO  CALCULATE  THE  RESERVES,  AND  THE
CHANGE  IN  THE RESERVES FROM THE BEGINNING OF THE PLAN'S FISCAL YEAR TO
THE END OF THE PLAN'S FISCAL YEAR. IN ADDITION, THE NOTES  TO  FINANCIAL
STATEMENT SHALL DETAIL THE ASSETS COMPRISING THE CONTINGENT RESERVE FUND
TO  DEMONSTRATE  COMPLIANCE WITH PARAGRAPH ONE OF SUBSECTION (H) OF THIS
SECTION.
  (3) A FREELANCERS ASSOCIATION THAT FAILS TO FILE ANY REPORT OR  STATE-
MENT REQUIRED BY THIS CHAPTER, OR FAILS TO REPLY WITHIN THIRTY DAYS TO A
WRITTEN  INQUIRY BY THE SUPERINTENDENT IN CONNECTION THEREWITH SHALL, IN
ADDITION TO OTHER PENALTIES PROVIDED BY THIS CHAPTER, BE  SUBJECT,  UPON
DUE  NOTICE AND OPPORTUNITY TO BE HEARD, TO A PENALTY OF UP TO ONE THOU-
SAND DOLLARS PER DAY  OF  DELAY,  NOT  TO  EXCEED  TWENTY-FIVE  THOUSAND
DOLLARS IN THE AGGREGATE, FOR EACH SUCH FAILURE.
  (J)  THE  SUPERINTENDENT MAY, PURSUANT TO SECTIONS THREE HUNDRED NINE,
THREE HUNDRED TEN, THREE HUNDRED ELEVEN, AND  THREE  HUNDRED  TWELVE  OF
THIS  CHAPTER, AND PURSUANT TO THE FINANCIAL SERVICES LAW, MAKE AN EXAM-
INATION INTO THE AFFAIRS OF ANY FREELANCERS ASSOCIATION WITH REGARD TO A
FREELANCERS HEALTH PLAN ISSUED BY THE FREELANCERS ASSOCIATION, AS  OFTEN
AS  THE  SUPERINTENDENT  DEEMS  IT  EXPEDIENT  FOR THE PROTECTION OF THE
INTERESTS OF THE PEOPLE OF THIS STATE.

S. 4526                             6

  (K)(1) THE  SUPERINTENDENT  MAY  SUSPEND  OR  REVOKE  A  DEMONSTRATION
PROGRAM WAIVER ISSUED TO A FREELANCERS ASSOCIATION IF THE SUPERINTENDENT
FINDS,  AFTER  NOTICE  AND HEARING, THAT THE FREELANCERS ASSOCIATION HAS
FAILED TO COMPLY WITH ANY REQUIREMENT IMPOSED ON IT BY THE PROVISIONS OF
THIS  CHAPTER AND IF IN THE SUPERINTENDENT'S JUDGMENT SUCH SUSPENSION OR
REVOCATION IS REASONABLY NECESSARY  TO  PROTECT  THE  INTERESTS  OF  THE
PEOPLE OF THIS STATE, INCLUDING:
  (A)  FOR  ANY  CAUSE  THAT  WOULD  BE A BASIS FOR DENIAL OF AN INITIAL
APPLICATION FOR A DEMONSTRATION PROGRAM WAIVER;
  (B) FAILURE TO MAINTAIN THE RESERVES REQUIRED  BY  SUBSECTION  (H)  OF
THIS SECTION; OR
  (C)  THE  SUPERINTENDENT  FINDS  THAT  THE FREELANCERS ASSOCIATION HAS
REFUSED TO PRODUCE ITS ACCOUNTS, RECORDS, AND FILES FOR  EXAMINATION  OR
HAS REFUSED TO COOPERATE OR GIVE INFORMATION WITH RESPECT TO THE AFFAIRS
OF  THE FREELANCERS HEALTH PLAN OR TO PERFORM ANY OTHER LEGAL OBLIGATION
RELATING TO SUCH AN EXAMINATION WHEN REQUIRED BY THE SUPERINTENDENT.
  (2) ANY DEMONSTRATION PROGRAM WAIVER SUSPENDED OR REVOKED  UNDER  THIS
SUBSECTION SHALL BE SURRENDERED TO THE SUPERINTENDENT, AND THE FREELANC-
ERS  ASSOCIATION  SHALL NOTIFY ALL MEMBERS OF THAT DECISION IN SUCH FORM
AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE, BUT NOT LATER  THAN  TEN
DAYS  AFTER RECEIPT OF NOTICE OF THE SUPERINTENDENT'S DECISION REQUIRING
SUSPENSION OR REVOCATION. IN ADDITION, THE FREELANCERS ASSOCIATION SHALL
SUBMIT A PLAN FOR THE  SUPERINTENDENT'S  APPROVAL  FOR  WINDING  UP  THE
PLAN'S AFFAIRS IN AN ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT
OF  ALL  BENEFITS,  IN  SUCH  FORM  AND MANNER AS THE SUPERINTENDENT MAY
PRESCRIBE.
  (3) NOTWITHSTANDING SUBDIVISION TWO OF  SECTION  EIGHTY-SEVEN  OF  THE
PUBLIC OFFICERS LAW, ALL FINAL DECISIONS TO SUSPEND OR REVOKE THE DEMON-
STRATION  PROGRAM  WAIVER WITH REGARD TO A FREELANCERS HEALTH PLAN SHALL
BE PUBLIC.
  (L) IN ANY CASE IN WHICH A  FREELANCERS  ASSOCIATION  DETERMINES  THAT
THERE  IS  A  REASON  TO  BELIEVE  THAT THE FREELANCERS HEALTH PLAN WILL
TERMINATE, THE FREELANCERS ASSOCIATION SHALL SO INFORM  THE  SUPERINTEN-
DENT AT LEAST SIXTY DAYS PRIOR THERETO, AND SHALL FILE A SWORN STATEMENT
WITH  THE  SUPERINTENDENT  CONCERNING ALL CURRENT AND FUTURE LIABILITIES
UNDER ITS DISCONTINUED PLAN. THE FREELANCERS ASSOCIATION SHALL SUBMIT  A
PLAN FOR THE SUPERINTENDENT'S APPROVAL FOR WINDING UP THE PLAN'S AFFAIRS
IN  AN  ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT OF ALL BENE-
FITS, IN SUCH FORM AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE.
  (M)(1) NO PART OF ANY FUNDS OF THE FREELANCERS  ASSOCIATION,  AS  THEY
PERTAIN  TO  THE FREELANCERS HEALTH PLAN, SHALL BE SUBJECT TO THE CLAIMS
OF GENERAL CREDITORS OF THE FREELANCERS ASSOCIATION UNTIL ALL PLAN BENE-
FITS AND OTHER PLAN OBLIGATIONS HAVE BEEN SATISFIED.  UNTIL  SUCH  TIME,
THE  FREELANCERS  ASSOCIATION  SHALL  CONTINUE  TO MAINTAIN AND FUND THE
RESERVE FUNDS REQUIRED TO BE ESTABLISHED UNDER SUBSECTION  (H)  OF  THIS
SECTION.  IF  AT  ANY TIME THE SUPERINTENDENT DETERMINES THAT ADDITIONAL
FUNDS SHALL BE DEPOSITED IN THE  RESERVE  FUNDS,  THEN  THE  FREELANCERS
ASSOCIATION SHALL MAKE THE DEPOSIT WITHIN THIRTY DAYS OF THE SUPERINTEN-
DENT'S DETERMINATION.
  (2)  IF,  AFTER  TWENTY-FOUR  MONTHS,  OR SUCH LONGER PERIOD AS DEEMED
NECESSARY BY THE SUPERINTENDENT, ALL PLAN BENEFITS AND OTHER PLAN  OBLI-
GATIONS  HAVE BEEN SATISFIED, THE FREELANCERS ASSOCIATION, UPON APPROVAL
BY THE SUPERINTENDENT, SHALL NO LONGER BE REQUIRED  TO  MAINTAIN  ASSETS
WITHIN  THE  PLAN'S  RESERVE FUNDS WITHIN RESTRICTED ACCOUNTS WITHIN THE
FREELANCERS ASSOCIATION'S GENERAL ACCOUNTING LEDGER SYSTEM.

S. 4526                             7

  (N) A FREELANCERS ASSOCIATION THAT RECEIVES  A  DEMONSTRATION  PROGRAM
WAIVER  UNDER  THIS  SECTION SHALL SUBMIT PERIODIC REPORTS TO THE SUPER-
INTENDENT SUFFICIENT TO ENABLE THE SUPERINTENDENT TO EVALUATE THE EFFEC-
TIVENESS OF THE DEMONSTRATION PROGRAM.   SUCH REPORTS  SHALL  INCLUDE  A
COMPARISON  OF  THE COST OF BENEFITS OBTAINED UNDER THE PROGRAM TO OTHER
AVAILABLE INSURANCE OPTIONS AND ANY OTHER INFORMATION  REQUIRED  BY  THE
SUPERINTENDENT.
  (O)  A  FREELANCERS  ASSOCIATION SHALL NOT ISSUE A STOP-LOSS INSURANCE
POLICY.
  (P) A FREELANCERS HEALTH PLAN SHALL PROVIDE BENEFITS ONLY TO INDEPEND-
ENT WORKERS WHO ARE MEMBERS OF THE  FREELANCERS  ASSOCIATION  SPONSORING
THE PLAN AND SUCH MEMBERS' SPOUSES, DOMESTIC PARTNERS AND DEPENDENTS.
  (Q)  THE  PROVISIONS  OF  THIS CHAPTER REQUIRING LICENSURE OF INSURERS
SHALL BE WAIVED WITH RESPECT TO  A  FREELANCERS  HEALTH  PLAN  OPERATING
UNDER  A DEMONSTRATION PROGRAM WAIVER. A FREELANCERS ASSOCIATION OPERAT-
ING FREELANCERS HEALTH PLAN PURSUANT TO A DEMONSTRATION  PROGRAM  WAIVER
SHALL  NOT  BE  DEEMED  TO  BE AN INSURER UNDER SECTION ONE THOUSAND ONE
HUNDRED ONE OF THIS ARTICLE AND SHALL NOT BE SUBJECT TO  THE  PROVISIONS
OF  THIS  CHAPTER  REGULATING  INSURERS EXCEPT AS EXPRESSLY SET FORTH IN
THIS SECTION.
  (R) THE SUPERINTENDENT MAY PROMULGATE SUCH REGULATIONS AS  THE  SUPER-
INTENDENT  DEEMS  NECESSARY  TO IMPLEMENT THE PROVISIONS OF THIS SECTION
AND TO ENSURE THAT THE PLANS ESTABLISHED UNDER THIS SECTION ARE  IN  THE
BEST  INTERESTS  OF  THE  FREELANCERS  ASSOCIATION'S  MEMBERS, AND THEIR
SPOUSES, DOMESTIC PARTNERS AND DEPENDENTS.
  (S) EXCEPT AS OTHERWISE PROVIDED  IN  THIS  SECTION,  ANY  FREELANCERS
ASSOCIATION THAT VIOLATES THIS SECTION SHALL BE SUBJECT TO THE PENALTIES
SET FORTH IN SECTION ONE HUNDRED NINE OF THIS CHAPTER.
  S  2.  This  act shall take effect immediately and shall expire and be
deemed repealed December 31, 2014.

Co-Sponsors

S4526A - Bill Details

See Assembly Version of this Bill:
A6519B
Law Section:
Insurance Law
Laws Affected:
Add §1125, amd §§4237-a & 1108, Ins L

S4526A - Bill Texts

view summary

Creates the freelancers health plan demonstration program; provides that such program would be a self-funded plan maintained by an association for the purpose of providing medical, surgical, or hospital services to independent workers; provides for an expiration of December 31, 2014.

view sponsor memo
BILL NUMBER:S4526A

TITLE OF BILL: An act to amend the insurance law, in relation to
creating the freelancers health plan demonstration program; and
providing for the repeal of such provisions upon expiration thereof

PURPOSE:

This bill would allow the previously authorized and extended
freelancers demonstration program to run to its expiration date of
December 31, 2014.

SUMMARY OF PROVISIONS:

This bill would allow for the continuation of the freelancers
demonstration program and permit 25,000 currently insured independent
workers to maintain their health benefits through December 2014. The
bill is modeled on previously enacted legislation for student health
plans sponsored by New York State independent universities and would
safeguard members' health coverage by allowing them to move their
coverage from Freelancers Insurance Company (FIC), an article 42
licensed insurance company, to a newly created self-insured health
fund called Freelancers Health Plan , which would continue to offer
eligible Freelancers Union members affordable health benefit plans.
Freelancers Health Plan would be regulated by the Department of
Financial Services and would be required to follow most of the same
rules and regulations as a non-profit health insurer established
pursuant to Article 43 of the Insurance law, including complying with
stringent consumer protection provisions, minimum reserve requirements
and financial reporting. The Plan would offer at least one plan that
complies with the ACA metal tier requirements and, upon approval from
CMS, its offerings would be considered Minimum Essential Coverage. In
addition, the legislation would subject Freelancers Union to the
penalties established pursuant to section 109 of the Insurance Law
should the Freelancers Union violate the provisions of this bill. The
legislation would maintain the existing demonstration program's
current sunset date of December 31, 2014.

JUSTIFICATION:.

In 2009, New York State authorized a demonstration program through
2013 providing health insurance coverage to independent workers, a
constituency which historically has had limited access to affordable,
comprehensive health benefits. Freelancers Insurance Company (FIC) was
created to serve independent workers who, unlike the majority of
workers, are unable to access health benefits from a traditional
employer. In. 2012, two years after the ACA was enacted, the
legislature extended the sunset date to December 31, 2014 to allow FIC
members one full year to acclimate to the new landscape created by the
ACA. Today, more than 25,000 Freelancers Union members and their
dependents receive affordable health insurance from FIC, a health
insurance company wholly owned by Freelancers Union. FIC premiums are
on average 40% less than plans available in the individual and group
markets in New York City and last year FIC had a 0% premium increase
across all plans, well below the 9.6% average increase for small group
plans in New York State. Additionally, as of November 2012, FIC


members can access free primary care and preventative services through
a state of the art medical home located in Downtown Brooklyn.

FIC is currently is licensed as an Article 42 insurance company and as
such is regulated by DFS. Effective January 1, 2014, the ACA, as
specified in recently promulgated CMS rules, will require health
insurers participating in the individual or small group market in a
state to offer insurance to all individuals or groups in that state,
to offer coverage that fits within narrow actuarial value ranges and
to participate in various risk sharing pools. The ACA failed to
incorporate any exceptions to these requirements for existing
insurance demonstration programs such as FIC that were designed to
make affordable coverage available to independent workers with middle
incomes. The obligations imposed under the ACA will impose severe
hardship on FTC members, jeopardizing their ability to continue to
obtain affordable coverage. Most importantly, FIC's actuaries estimate
that application of the ACA would force FIC to raise premiums by _%,
an average of $178 per member per month.

FTC members are a unique class of New Yorkers who historically have
faced difficulty obtaining affordable health coverage. The majority of
FIC members are middle class (annual incomes of -$50,000 to $100,000
for a family of four) and all members have no access to health
insurance through a traditional employer relationship. They are not
positioned favorably to purchase insurance through the exchanges
since, as middle income earners, most of them will not be eligible for
tax subsidies under the ACA and they have no employer relationship to
fall back on. As such, FIC provides a needed service to middle class
working New Yorkers that cannot be easily replicated. The bill would
allow members of FIC to continue to receive their existing benefits
for one year after implementation of the ACA reforms, as originally
contemplated by the Legislature.

LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately and shall expire and be deemed repealed on December 31,
2014.

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

                                 4526--A

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              April 8, 2013
                               ___________

Introduced  by  Sens.  HANNON,  SAVINO, BRESLIN, AVELLA, HOYLMAN -- read
  twice and ordered printed, and when printed to  be  committed  to  the
  Committee  on Insurance -- committee discharged, bill amended, ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the insurance law, in relation to creating the freelanc-
  ers health plan demonstration 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.  The insurance law is amended by adding a new section 1125
to read as follows:
  S 1125. FREELANCERS  HEALTH  PLAN  DEMONSTRATION  PROGRAM.    (A)  FOR
PURPOSES OF THIS SECTION:
  (1) "FREELANCERS ASSOCIATION" MEANS AN ENTITY THAT: (A) IS EXEMPT FROM
FEDERAL  TAXATION  UNDER  SECTION  501(C)(3)  OR  (C)(4) OF THE INTERNAL
REVENUE CODE; AND (B) PRIOR TO JANUARY FIRST, TWO THOUSAND THIRTEEN, HAS
BEEN ISSUED ONE OR MORE HEALTH INSURANCE POLICIES BY  AN  INSURER  UNDER
SECTION ONE THOUSAND ONE HUNDRED TWENTY-THREE OF THIS ARTICLE.
  (2)  "FREELANCERS HEALTH PLAN" OR "PLAN"  MEANS A PLAN MAINTAINED BY A
FREELANCERS ASSOCIATION FOR THE PURPOSE OF PROVIDING MEDICAL,  SURGICAL,
OR HOSPITAL SERVICES TO INDEPENDENT WORKERS WHO ARE MEMBERS OF THE FREE-
LANCERS  ASSOCIATION  AND  A MEMBER'S SPOUSE, CHILDREN AND OTHER PERSONS
CHIEFLY DEPENDENT UPON THE MEMBER FOR SUPPORT AND MAINTENANCE.
  (3) "INDEPENDENT WORKER" MEANS AN INDIVIDUAL WHO: (A) IS AN  INDEPEND-
ENT  CONTRACTOR;  (B) IS SELF-EMPLOYED; (C) WORKS PART-TIME; (D) OBTAINS
TEMPORARY WORK THROUGH AN EMPLOYMENT AGENCY; (E) PERFORMS TEMPORARY WORK
FOR TWO OR MORE EMPLOYERS SIMULTANEOUSLY; (F) IS A DOMESTIC  CHILD  CARE
WORKER;  OR  (G)  IS HIRED TO WORK FULL-TIME FOR A SINGLE EMPLOYER FOR A
PERIOD NOT TO EXCEED EIGHTEEN MONTHS IF SUCH  EMPLOYER  DOES  NOT  OFFER
GROUP  HEALTH  INSURANCE  TO EMPLOYEES EMPLOYED ON A TEMPORARY BASIS. AN
INDIVIDUAL IS NOT AN  INDEPENDENT  WORKER  IF  HE  OR  SHE  IS  EMPLOYED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10111-06-3

S. 4526--A                          2

FULL-TIME  BY A SINGLE EMPLOYER, WITH THE EXCEPTION OF AN INDIVIDUAL WHO
MEETS THE REQUIREMENTS OF SUBPARAGRAPH (D), (F) OR  (G)  OF  THIS  PARA-
GRAPH.
  (4) "MEMBER CONTRACT" MEANS EVIDENCE OF COVERAGE FURNISHED TO AN INDE-
PENDENT  WORKER  WHO  IS A MEMBER OF A FREELANCERS ASSOCIATION THAT SETS
FORTH ALL BENEFITS AND TERMS AND CONDITIONS WITH REGARD TO A FREELANCERS
HEALTH PLAN.
  (5) "QUALIFIED ACTUARY" MEANS AN ACTUARY  WHO  IS  A  MEMBER  IN  GOOD
STANDING  OF  THE AMERICAN ACADEMY OF ACTUARIES OR SOCIETY OF ACTUARIES,
WITH EXPERIENCE IN ESTABLISHING RATES FOR SELF-INSURED TRUSTS  PROVIDING
HEALTH BENEFITS OR OTHER SIMILAR EXPERIENCE.
  (B) A FREELANCERS ASSOCIATION SHALL NOT ESTABLISH, MAINTAIN, OR OTHER-
WISE  PARTICIPATE  IN  A  FREELANCERS HEALTH PLAN UNLESS THE FREELANCERS
ASSOCIATION OBTAINS AND MAINTAINS A DEMONSTRATION  PROGRAM  WAIVER  FROM
THE SUPERINTENDENT PURSUANT TO THE PROVISIONS OF THIS SECTION.
  (C)  EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, A FREELANCERS ASSO-
CIATION OPERATING A FREELANCERS HEALTH PLAN SHALL:
  (1) WITH THE EXCEPTION OF THE ENROLLMENT PROVISIONS AS PROVIDED FOR IN
SECTION FOUR THOUSAND  THREE  HUNDRED  SEVENTEEN  OF  THIS  CHAPTER  AND
STABILIZATION  OF HEALTH INSURANCE MARKETS AND PREMIUM RATES AS PROVIDED
FOR IN SECTION FOUR THOUSAND TWO HUNDRED THIRTY-THREE OF  THIS  CHAPTER,
BE  SUBJECT  TO  THE  SAME  PROVISIONS AND REQUIREMENTS OF A CORPORATION
ORGANIZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; AND
  (2) PROVIDE THAT ITS PLAN WILL HAVE AN EXPECTED LOSS RATIO OF NOT LESS
THAN EIGHTY-TWO PERCENT. IN REVIEWING A RATE FILING OR APPLICATION BY  A
PLAN,  THE  SUPERINTENDENT  MAY  MODIFY  THE EIGHTY-TWO PERCENT EXPECTED
MINIMUM LOSS RATIO REQUIREMENT  IF  THE  SUPERINTENDENT  DETERMINES  THE
MODIFICATION  TO  BE  IN THE INTERESTS OF THE PEOPLE OF THIS STATE OR IF
THE SUPERINTENDENT DETERMINES THAT A MODIFICATION IS NECESSARY TO  MAIN-
TAIN  PLAN  SOLVENCY.  NO  LATER  THAN ONE HUNDRED TWENTY DAYS AFTER THE
CLOSE OF A PLAN'S FISCAL YEAR, A PLAN SHALL ANNUALLY REPORT  THE  ACTUAL
LOSS  RATIO  FOR THE PREVIOUS PLAN FISCAL YEAR IN A FORMAT ACCEPTABLE TO
THE SUPERINTENDENT. IF THE EXPECTED LOSS RATIO  IS  NOT  MET,  THEN  THE
SUPERINTENDENT MAY DIRECT THE PLAN TO TAKE CORRECTIVE ACTION IN ADDITION
TO  THE  REQUIREMENTS OF SECTION FORTY-THREE HUNDRED EIGHT OF THIS CHAP-
TER; AND
  (3) INCLUDE IN ITS MEMBER CONTRACTS THAT THE MEMBER CONTRACT WILL  NOT
BE EFFECTIVE AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN; AND
  (4)   PAY   ALL   CLAIMS   UNDER  ITS  MEMBER  CONTRACTS  BY  DECEMBER
THIRTY-FIRST, TWO THOUSAND FIFTEEN.
  (D) A FREELANCERS ASSOCIATION SHALL FILE AN APPLICATION FOR  A  DEMON-
STRATION   PROGRAM  WAIVER  ON  SUCH  FORM  AS  THE  SUPERINTENDENT  MAY
PRESCRIBE, AND SHALL PROVIDE TO THE SATISFACTION OF  THE  SUPERINTENDENT
THE FOLLOWING:
  (1)  A  COPY  OF THE MEMBER CONTRACT, INCLUDING A TABLE OF THE PREMIUM
RATES CHARGED OR PROPOSED TO BE CHARGED, THAT EFFECTIVE  JANUARY  FIRST,
TWO  THOUSAND FOURTEEN, CONTAINS THE BENEFITS DESCRIBED IN PARAGRAPH ONE
OF SUBSECTION (B) OF SECTION FOUR THOUSAND THREE HUNDRED TWENTY-EIGHT OF
THIS CHAPTER AND SHALL OFFER TO ITS MEMBERS, AT A MINIMUM, A CONTRACT AT
ONE OF THE LEVELS OF COVERAGE, AS DEFINED  IN  SECTION  1302(D)  OF  THE
AFFORDABLE CARE ACT, 42 USC 18022(D);
  (2)  A  REPORT  INDICATING  THE BENEFIT PROVISIONS, PREMIUM RATES, AND
INCURRED MEDICAL LOSSES ASSOCIATED WITH  THE  FREELANCERS  ASSOCIATION'S
MEMBERS  UNDER  THE  INSURANCE POLICIES INSURING THE FREELANCERS ASSOCI-
ATION'S  MEMBERS  PURSUANT  TO  SECTION   ONE   THOUSAND   ONE   HUNDRED

S. 4526--A                          3

TWENTY-THREE  OF  THIS  ARTICLE FOR THE THREE YEARS PRIOR TO THE DATE OF
THE APPLICATION;
  (3)  THE  MOST RECENT CERTIFIED INDEPENDENTLY-AUDITED FINANCIAL STATE-
MENT FOR THE FREELANCERS ASSOCIATION;
  (4) A REPORT  PREPARED  BY  A  QUALIFIED  ACTUARY  THAT  SUPPORTS  THE
PROPOSED PREMIUMS FOR THE PLAN;
  (5)  A  COPY OF ALL AGREEMENTS BETWEEN THE FREELANCERS ASSOCIATION AND
ANY PLAN ADMINISTRATOR, WITH REGARD TO THE FREELANCERS HEALTH PLAN;
  (6) A PRO-FORMA BALANCE SHEET, INCLUDING ACTUARIALLY DETERMINED CLAIMS
LIABILITIES, AND STATEMENT OF REVENUE AND EXPENSES, INCLUDING REASONABLY
PROJECTED EXPENSES, MEDICAL  LOSSES,  AND  PREMIUMS  TO  BE  CHARGED  TO
MEMBERS OF THE PLAN;
  (7) A NARRATIVE DESCRIPTION OF:
  (A)  THE  ACCOUNTING METHODOLOGY THAT THE FREELANCERS ASSOCIATION WILL
UTILIZE, WHICH SHALL BE IN ACCORDANCE WITH  STATUTORY  ACCOUNTING  PRAC-
TICES  AND  PROCEDURES  AS  PRESCRIBED  BY APPLICABLE PROVISIONS OF THIS
CHAPTER AND REGULATIONS PROMULGATED THEREUNDER AS WOULD BE APPLICABLE TO
A CORPORATION ORGANIZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER;
  (B) BILLING AND CLAIM PAYMENT  PROCEDURES,  INCLUDING  THE  NAMES  AND
CONTACT  INFORMATION  FOR THOSE PERSONS CHARGED WITH HANDLING ACCOUNTING
AND CLAIMS ISSUES; AND
  (C) ANY COMPENSATION  THE  FREELANCERS  ASSOCIATION  WILL  RECEIVE  IN
CONNECTION WITH THE PLAN;
  (8)  A COPY OF ANY STOP-LOSS INSURANCE POLICY ISSUED OR PROPOSED TO BE
ISSUED BY AN INSURER AUTHORIZED TO  DO  THE  BUSINESS  OF  ACCIDENT  AND
HEALTH INSURANCE IN THIS STATE OR IS A HEALTH SERVICE CORPORATION ORGAN-
IZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; AND
  (9) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  (E) UPON COMPLIANCE WITH THIS SECTION, TO THE EXTENT PERMISSIBLE UNDER
FEDERAL LAW, IF A FREELANCERS ASSOCIATION SUBMITS A MATERIALLY SATISFAC-
TORY AND COMPLETE APPLICATION WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF
THIS  SECTION, THEN THE SUPERINTENDENT MAY ISSUE THE FREELANCERS ASSOCI-
ATION A DEMONSTRATION PROGRAM WAIVER THAT  IS  EFFECTIVE  ON  OR  BEFORE
JANUARY FIRST, TWO THOUSAND FOURTEEN. EVERY DEMONSTRATION PROGRAM WAIVER
SHALL  CONTAIN  THE  NAME OF THE ENTITY AND ITS HOME OFFICE ADDRESS. THE
SUPERINTENDENT SHALL REFUSE TO GRANT A DEMONSTRATION PROGRAM  WAIVER  TO
AN  APPLICANT  THAT FAILS TO MEET THE REQUIREMENTS OF THIS SECTION.  THE
SUPERINTENDENT MAY REFUSE TO ISSUE ANY DEMONSTRATION PROGRAM WAIVER  IF,
IN  THE  SUPERINTENDENT'S  JUDGMENT,  THE  REFUSAL WILL BEST PROMOTE THE
INTERESTS OF THE PEOPLE OF THIS STATE. NOTICE OF  REFUSAL  SHALL  BE  IN
WRITING  AND  SHALL    SET FORTH THE BASIS FOR REFUSAL. IF THE APPLICANT
SUBMITS A WRITTEN REQUEST WITHIN THIRTY DAYS AFTER RECEIPT OF THE NOTICE
OF REFUSAL, THEN THE SUPERINTENDENT SHALL CONDUCT A HEARING TO GIVE  THE
APPLICANT  THE  OPPORTUNITY  TO SHOW CAUSE WHY THE REFUSAL SHOULD NOT BE
MADE FINAL.
  (F) IN ORDER TO OBTAIN AND MAINTAIN A DEMONSTRATION PROGRAM WAIVER,  A
FREELANCERS ASSOCIATION SHALL:
  (1)  FILE A COMPLETE APPLICATION WITH THE SUPERINTENDENT IN ACCORDANCE
WITH SUBSECTION (D) OF THIS SECTION;
  (2) HAVE WITHIN ITS OWN ORGANIZATION ADEQUATE RESOURCES AND  COMPETENT
PERSONNEL  TO  ADMINISTER  THE  FREELANCERS  HEALTH PLAN OR, IN ORDER TO
PROVIDE SUCH ADMINISTRATIVE SERVICES, IN WHOLE OR PART, HAVE  CONTRACTED
WITH  A PERSON OR ENTITY TO SERVE AS A PLAN ADMINISTRATOR, DETERMINED BY
THE FREELANCERS ASSOCIATION TO BE QUALIFIED BASED UPON WRITTEN  DOCUMEN-
TATION  FURNISHED  TO  THE  FREELANCERS  ASSOCIATION,  PROVIDED THAT THE

S. 4526--A                          4

DOCUMENTATION  SHALL  BE  MADE  AVAILABLE  TO  THE  SUPERINTENDENT  UPON
REQUEST;
  (3)  ESTABLISH  AND  MAINTAIN  PREMIUM  RATES  SUFFICIENT  TO MEET ITS
CONTRACTUAL OBLIGATIONS AND TO  SATISFY  THE  RESERVE  REQUIREMENTS  SET
FORTH IN SUBSECTION (H) OF THIS SECTION;
  (4)  ESTABLISH  AND  MAINTAIN  A FAIR AND EQUITABLE PROCESS FOR CLAIMS
REVIEW, DISPUTE RESOLUTION, AND APPEAL PROCEDURES, INCLUDING ARBITRATION
OF REJECTED CLAIMS, AND PROCEDURES FOR HANDLING CLAIMS FOR  BENEFITS  IN
THE  EVENT OF PLAN DISSOLUTION, THAT ARE SATISFACTORY TO THE SUPERINTEN-
DENT AND ARE SUBJECT TO ARTICLE FORTY-NINE OF THIS CHAPTER;
  (5) PROVIDE MEMBERS WITH A MEMBER CONTRACT;
  (6) MAINTAIN ITS FUNCTIONS, ACTIVITIES  AND  SERVICES  UNDERTAKEN  AND
PERFORMED  PURSUANT  TO A DEMONSTRATION PROGRAM WAIVER SEPARATE FROM ANY
OTHER FUNCTION, ACTIVITY OR SERVICE THROUGH THE MAINTENANCE OF  SEPARATE
RECORDS,  REPORTS  AND  ACCOUNTS  FOR  EACH SUCH FREELANCERS ASSOCIATION
FUNCTION, ACTIVITY, OR SERVICE. THE RECORDS, REPORTS AND ACCOUNTS OF THE
FREELANCERS ASSOCIATION SHALL BE MAINTAINED SEPARATELY FROM THOSE OF ANY
OTHER PERSON OR FREELANCERS ASSOCIATION THAT IS A PARENT, SUBSIDIARY  OR
AFFILIATE OF THE FREELANCERS ASSOCIATION;
  (7) FILE ALL PLAN DOCUMENTS AND ANY AMENDMENTS THERETO WITH THE SUPER-
INTENDENT  AND  RECEIVE THE SUPERINTENDENT'S APPROVAL IN ACCORDANCE WITH
THIS SECTION; AND
  (8) PROVIDE PROMINENT, SEPARATELY STATED NOTICE TO  ALL  PLAN  PARTIC-
IPANTS  THAT  THEIR CONTRACTS WILL NOT BE EFFECTIVE AFTER DECEMBER THIR-
TY-FIRST, TWO THOUSAND FOURTEEN, AND THAT THEIR POLICIES ARE NON-RENEWA-
BLE FOR ANY PERIOD BEYOND DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN.
  (G) A  FREELANCERS  ASSOCIATION  THAT  HAS  RECEIVED  A  DEMONSTRATION
PROGRAM  WAIVER  SHALL FILE WITH THE SUPERINTENDENT, FOR THE SUPERINTEN-
DENT'S PRIOR APPROVAL, ANY AMENDMENTS TO THE MEMBER CONTRACT,  FREELANC-
ERS HEALTH PLAN, OR PREMIUM RATES CHARGED FOR THE PLAN.
  (H)(1)  A  FREELANCERS  ASSOCIATION  SHALL  ESTABLISH  AND  MAINTAIN A
RESERVE TO BE DESIGNATED AS THE STATUTORY RESERVE  FUND,  IN  AN  AMOUNT
EQUAL TO TWELVE AND ONE-HALF PER CENTUM OF THE NET PREMIUM INCOME OF THE
PLAN,  IN  ADDITION  TO  RESERVES CONSISTING OF THE AMOUNTS NECESSARY TO
SATISFY ALL CONTRACTUAL OBLIGATIONS AND LIABILITIES OF THE PLAN, INCLUD-
ING: (A) A RESERVE FOR PAYMENT OF CLAIMS AND EXPENSES  THEREON  REPORTED
BUT  NOT  YET PAID, AND CLAIMS AND EXPENSES THEREON INCURRED BUT NOT YET
REPORTED; AND (B) A RESERVE FOR UNEARNED PREMIUM  EQUIVALENTS,  COMPUTED
PRO-RATA ON THE BASIS OF THE UNEXPIRED PORTION OF THE POLICY PERIOD.
  (2) IF AT ANY TIME THE RESERVE FUNDS REQUIRED TO BE ESTABLISHED PURSU-
ANT  TO  THIS  SECTION FALL BELOW THE REQUIRED MINIMUM AMOUNTS, THEN THE
FREELANCERS ASSOCIATION SHALL IMMEDIATELY NOTIFY THE  SUPERINTENDENT  OF
SUCH  IMPAIRMENT.  THE FREELANCERS ASSOCIATION SHALL CURE THE IMPAIRMENT
WITHIN FIVE BUSINESS DAYS.
  (3) THE ASSETS CONSTITUTING THE FREELANCERS  HEALTH  PLAN'S  STATUTORY
RESERVE FUND SHALL CONSIST SOLELY OF CERTIFICATES OF DEPOSIT ISSUED BY A
UNITED STATES BANK AND PAYABLE IN UNITED STATES LEGAL TENDER, OR SECURI-
TIES  REPRESENTING INVESTMENTS OF THE TYPES SPECIFIED IN PARAGRAPHS ONE,
TWO, THREE, EIGHT, AND TEN OF SUBSECTION (A)  OF  SECTION  ONE  THOUSAND
FOUR  HUNDRED  FOUR OF THIS CHAPTER, OR AS OTHERWISE EXPRESSLY PERMITTED
BY THE SUPERINTENDENT. ANY INTEREST EARNED OR CAPITAL GAIN  REALIZED  ON
THE  MONEY  SO  DEPOSITED OR INVESTED SHALL ACCRUE TO AND BECOME PART OF
THE PLAN'S STATUTORY RESERVE FUNDS.
  (4) THE PLAN'S ASSETS,  LIABILITIES,  INCOME  AND  EXPENSES  SHALL  BE
ACCOUNTED  FOR  SEPARATE  AND  APART FROM ALL OTHER ASSETS, LIABILITIES,
INCOME AND EXPENSES OF THE FREELANCERS ASSOCIATION. THE  ACCOUNTING  FOR

S. 4526--A                          5

THE  PLAN'S  STATUTORY RESERVE FUND SHALL SHOW: (A) THE PURPOSE, SOURCE,
DATE AND AMOUNT OF EACH SUM PAID INTO THE FUND; (B) THE INTEREST  EARNED
BY  SUCH  FUND;  (C)  CAPITAL GAINS OR LOSSES RESULTING FROM THE SALE OF
INVESTMENTS  OF  THE  PLAN'S  STATUTORY  RESERVE  FUND;  (D)  THE ORDER,
PURPOSE, DATE AND AMOUNT OF EACH  PAYMENT  FROM  THE  STATUTORY  RESERVE
FUND;  AND (E) THE ASSETS OF THE STATUTORY RESERVE FUND, INDICATING CASH
BALANCE AND SCHEDULE OF INVESTMENTS.
  (5) THE REQUIREMENTS FOR FUNDING  OF  THE  PLAN'S  RESERVES  SHALL  BE
CALCULATED  USING  GENERALLY  ACCEPTED ACCOUNTING PRINCIPLES. ONLY THOSE
EXPENSES THAT RELATE TO THE PLAN SHALL BE INCLUDED  IN  CALCULATING  THE
REQUIREMENTS FOR FUNDING OF THE PLAN'S RESERVE FUNDS. EXPENSES ALLOCATED
TO  THE PLAN SHALL BE ALLOCATED ON AN EQUITABLE BASIS IN CONFORMITY WITH
CUSTOMARY INSURANCE  ACCOUNTING  PRINCIPLES  CONSISTENTLY  APPLIED.  THE
BOOKS,  ACCOUNTS,  AND  RECORDS  OF  THE  PLAN SHALL BE MAINTAINED AS TO
CLEARLY AND ACCURATELY DISCLOSE THE NATURE AND DETAILS OF  ALL  EXPENSES
SO AS TO SUPPORT THE REASONABLENESS OF SUCH EXPENSES.
  (I)  (1)  A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT
WITHIN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF THE PLAN'S FISCAL YEAR  A
REPORT THAT CONTAINS:
  (A)  AN  ANNUAL  FINANCIAL STATEMENT, VERIFIED BY THE OATH OF AT LEAST
TWO OF THE FREELANCERS ASSOCIATION'S  PRINCIPAL  OFFICERS,  WITH  DIRECT
KNOWLEDGE  OF THE OPERATIONS OF THE FREELANCERS HEALTH PLAN, SHOWING THE
FINANCIAL CONDITION AND AFFAIRS OF  THE  PLAN  DURING  THE  MOST  RECENT
FISCAL  YEAR,  IN ACCORDANCE WITH LAW AND STATUTORY PRACTICES AND PROCE-
DURES AS ADOPTED BY THE SUPERINTENDENT, IN  A  FORM  PRESCRIBED  BY  THE
SUPERINTENDENT;
  (B)  THE IDENTITY OF THE QUALIFIED ACTUARY UTILIZED BY THE FREELANCERS
ASSOCIATION OR PLAN AND THE AMOUNT PAID TO THE QUALIFIED ACTUARY BY  THE
FREELANCERS ASSOCIATION OR PLAN DURING ITS MOST RECENT FISCAL YEAR;
  (C) THE IDENTITIES OF THE PLAN'S TEN LARGEST VENDORS BY PAYMENT AMOUNT
DURING ITS MOST RECENT FISCAL YEAR;
  (D) THE NAME AND CONTACT INFORMATION OF THE PERSON OR ENTITY APPOINTED
BY  THE  FREELANCERS  ASSOCIATION  TO  ADMINISTER THE FREELANCERS HEALTH
PLAN;
  (E) A PRO-FORMA STATEMENT OF PROJECTED REVENUE AND EXPENSES FOR HEALTH
BENEFITS ANTICIPATED BY THE PLAN FOR THE NEXT TWELVE-MONTH PERIOD OF THE
PLAN'S OPERATION, PROVIDED ON A FISCAL YEAR;
  (F) A DETAILED REPORT OF THE OPERATIONS AND CONDITION  OF  THE  PLAN'S
RESERVE FUNDS; AND
  (G) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  (2) A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT WITH-
IN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF ITS FREELANCERS HEALTH PLAN'S
FISCAL  YEAR  THE MOST RECENT CERTIFIED, INDEPENDENTLY AUDITED FINANCIAL
STATEMENT FOR THE FREELANCERS ASSOCIATION. THE STATEMENT  SHALL  INCLUDE
AN  OPINION  OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. THE NOTES TO
THE FINANCIAL STATEMENT SHALL SHOW THE FINANCIAL RESULTS  OF  THE  FREE-
LANCERS HEALTH PLAN OPERATIONS AND A DESCRIPTION AS TO HOW THE FREELANC-
ERS  ASSOCIATION  MEETS  THE  RESERVE  REQUIREMENTS  IN PARAGRAPH ONE OF
SUBSECTION (H) OF THIS SECTION, INCLUDING THE AMOUNTS REPORTED FOR  EACH
OF  THE  RESERVES,  THE  METHOD  USED TO CALCULATE THE RESERVES, AND THE
CHANGE IN THE RESERVES FROM THE BEGINNING OF THE PLAN'S FISCAL  YEAR  TO
THE  END  OF THE PLAN'S FISCAL YEAR. IN ADDITION, THE NOTES TO FINANCIAL
STATEMENT SHALL DETAIL THE ASSETS COMPRISING THE STATUTORY RESERVE  FUND
TO  DEMONSTRATE  COMPLIANCE WITH PARAGRAPH ONE OF SUBSECTION (H) OF THIS
SECTION.

S. 4526--A                          6

  (3) A FREELANCERS ASSOCIATION SHALL FILE A REPORT WITH THE SUPERINTEN-
DENT EACH QUARTER, WITHIN FORTY-FIVE DAYS AFTER QUARTER CLOSE,  DESCRIB-
ING  THE  PLAN'S CURRENT FINANCIAL STATUS AND PROVIDING SUCH INFORMATION
AS THE SUPERINTENDENT MAY PRESCRIBE.
  (4)  A FREELANCERS ASSOCIATION THAT FAILS TO FILE ANY REPORT OR STATE-
MENT REQUIRED BY THIS CHAPTER, OR FAILS TO REPLY WITHIN THIRTY DAYS TO A
WRITTEN INQUIRY BY THE SUPERINTENDENT IN CONNECTION THEREWITH SHALL,  IN
ADDITION  TO  OTHER PENALTIES PROVIDED BY THIS CHAPTER, BE SUBJECT, UPON
NOTICE AN OPPORTUNITY TO BE HEARD, TO A PENALTY OF UP  TO  ONE  THOUSAND
DOLLARS  PER DAY OF DELAY, NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS IN
THE AGGREGATE, FOR EACH SUCH FAILURE.
  (J) THE SUPERINTENDENT MAY, PURSUANT TO SECTIONS THREE  HUNDRED  NINE,
THREE  HUNDRED  TEN,  THREE  HUNDRED ELEVEN, AND THREE HUNDRED TWELVE OF
THIS CHAPTER, AND PURSUANT TO THE FINANCIAL SERVICES LAW, MAKE AN  EXAM-
INATION INTO THE AFFAIRS OF ANY FREELANCERS ASSOCIATION WITH REGARD TO A
FREELANCERS  HEALTH PLAN ISSUED BY THE FREELANCERS ASSOCIATION, AS OFTEN
AS THE SUPERINTENDENT DEEMS IT  EXPEDIENT  FOR  THE  PROTECTION  OF  THE
INTERESTS  OF  THE PEOPLE OF THIS STATE.  THE EXPENSES OF EVERY EXAMINA-
TION OF THE AFFAIRS OF THE FREELANCERS ASSOCIATION,  WITH  REGARD  TO  A
FREELANCERS  HEALTH  PLAN  ESTABLISHED  OR MAINTAINED BY THE FREELANCERS
ASSOCIATION, SHALL BE BORNE AND PAID FOR BY THE FREELANCERS  ASSOCIATION
SO EXAMINED. THE EXPENSES OF EXAMINATION SHALL INCLUDE REIMBURSEMENT FOR
THE  COMPENSATION  PAID  FOR  SERVICES OF PERSONS EMPLOYED BY THE SUPER-
INTENDENT OR BY THE SUPERINTENDENT'S AUTHORITY TO MAKE SUCH EXAMINATION,
AND FOR THE NECESSARY TRAVELING AND LIVING EXPENSES  OF  THE  PERSON  OR
PERSONS MAKING THE EXAMINATION.
  (K)(1)  THE  SUPERINTENDENT  MAY  SUSPEND  OR  REVOKE  A DEMONSTRATION
PROGRAM WAIVER ISSUED TO A FREELANCERS ASSOCIATION IF THE SUPERINTENDENT
FINDS, AFTER NOTICE AND HEARING, THAT THE  FREELANCERS  ASSOCIATION  HAS
FAILED TO COMPLY WITH ANY REQUIREMENT IMPOSED ON IT BY THE PROVISIONS OF
THIS  CHAPTER AND IF IN THE SUPERINTENDENT'S JUDGMENT SUCH SUSPENSION OR
REVOCATION IS REASONABLY NECESSARY  TO  PROTECT  THE  INTERESTS  OF  THE
PEOPLE OF THIS STATE, INCLUDING:
  (A)  FOR  ANY  CAUSE  THAT  WOULD  BE A BASIS FOR DENIAL OF AN INITIAL
APPLICATION FOR A DEMONSTRATION PROGRAM WAIVER;
  (B) FAILURE TO MAINTAIN THE RESERVES REQUIRED  BY  SUBSECTION  (H)  OF
THIS SECTION; OR
  (C) A DETERMINATION BY THE SUPERINTENDENT THAT THE FREELANCERS ASSOCI-
ATION  HAS REFUSED TO PRODUCE ITS ACCOUNTS, RECORDS, AND FILES FOR EXAM-
INATION OR HAS REFUSED TO COOPERATE OR GIVE INFORMATION WITH RESPECT  TO
THE AFFAIRS OF THE FREELANCERS HEALTH PLAN OR TO PERFORM ANY OTHER LEGAL
OBLIGATION  RELATING  TO SUCH AN EXAMINATION WHEN REQUIRED BY THE SUPER-
INTENDENT.
  (2) ANY DEMONSTRATION PROGRAM WAIVER SUSPENDED OR REVOKED  UNDER  THIS
SUBSECTION SHALL BE SURRENDERED TO THE SUPERINTENDENT, AND THE FREELANC-
ERS  ASSOCIATION  SHALL NOTIFY ALL MEMBERS OF THAT DECISION IN SUCH FORM
AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE, BUT NOT LATER  THAN  TEN
DAYS  AFTER RECEIPT OF NOTICE OF THE SUPERINTENDENT'S DECISION REQUIRING
SUSPENSION OR REVOCATION. IN ADDITION, THE FREELANCERS ASSOCIATION SHALL
SUBMIT A PLAN FOR THE  SUPERINTENDENT'S  APPROVAL  FOR  WINDING  UP  THE
PLAN'S AFFAIRS IN AN ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT
OF  ALL  BENEFITS,  IN  SUCH  FORM  AND MANNER AS THE SUPERINTENDENT MAY
PRESCRIBE.
  (3) NOTWITHSTANDING SUBDIVISION TWO OF  SECTION  EIGHTY-SEVEN  OF  THE
PUBLIC OFFICERS LAW, ALL FINAL DECISIONS TO SUSPEND OR REVOKE THE DEMON-

S. 4526--A                          7

STRATION  PROGRAM  WAIVER WITH REGARD TO A FREELANCERS HEALTH PLAN SHALL
BE PUBLIC.
  (L)  IN  ANY  CASE  IN WHICH A FREELANCERS ASSOCIATION DETERMINES THAT
THERE IS A REASON TO BELIEVE  THAT  THE  FREELANCERS  HEALTH  PLAN  WILL
TERMINATE,  THE  FREELANCERS ASSOCIATION SHALL SO INFORM THE SUPERINTEN-
DENT AT LEAST SIXTY DAYS PRIOR THERETO, AND SHALL FILE A SWORN STATEMENT
WITH THE SUPERINTENDENT CONCERNING ALL CURRENT  AND  FUTURE  LIABILITIES
UNDER  ITS DISCONTINUED PLAN. THE FREELANCERS ASSOCIATION SHALL SUBMIT A
PLAN FOR THE SUPERINTENDENT'S APPROVAL FOR WINDING UP THE PLAN'S AFFAIRS
IN AN ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT OF  ALL  BENE-
FITS, IN SUCH FORM AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE.
  (M)  NO  PART  OF  ANY  FUNDS  OF THE FREELANCERS ASSOCIATION, AS THEY
PERTAIN TO THE FREELANCERS HEALTH PLAN, SHALL BE SUBJECT TO  THE  CLAIMS
OF GENERAL CREDITORS OF THE FREELANCERS ASSOCIATION UNTIL ALL PLAN BENE-
FITS  AND  OTHER  PLAN OBLIGATIONS HAVE BEEN SATISFIED. UNTIL SUCH TIME,
THE FREELANCERS ASSOCIATION SHALL CONTINUE  TO  MAINTAIN  AND  FUND  THE
RESERVE  FUNDS  REQUIRED  TO BE ESTABLISHED UNDER SUBSECTION (H) OF THIS
SECTION. IF AT ANY TIME THE SUPERINTENDENT  DETERMINES  THAT  ADDITIONAL
FUNDS  SHALL  BE  DEPOSITED  IN  THE RESERVE FUNDS, THEN THE FREELANCERS
ASSOCIATION SHALL MAKE THE DEPOSIT WITHIN THIRTY DAYS OF THE SUPERINTEN-
DENT'S DETERMINATION.
  (N) A FREELANCERS ASSOCIATION THAT RECEIVES  A  DEMONSTRATION  PROGRAM
WAIVER  UNDER  THIS  SECTION SHALL SUBMIT PERIODIC REPORTS TO THE SUPER-
INTENDENT SUFFICIENT TO ENABLE THE SUPERINTENDENT TO EVALUATE THE EFFEC-
TIVENESS OF THE DEMONSTRATION PROGRAM.   SUCH REPORTS  SHALL  INCLUDE  A
COMPARISON  OF  THE COST OF BENEFITS OBTAINED UNDER THE PROGRAM TO OTHER
AVAILABLE INSURANCE OPTIONS AND ANY OTHER INFORMATION  REQUIRED  BY  THE
SUPERINTENDENT.
  (O)  A  FREELANCERS  ASSOCIATION SHALL NOT ISSUE A STOP-LOSS INSURANCE
POLICY.
  (P) A FREELANCERS HEALTH PLAN SHALL PROVIDE BENEFITS ONLY TO INDEPEND-
ENT WORKERS WHO ARE MEMBERS OF THE  FREELANCERS  ASSOCIATION  SPONSORING
THE  PLAN  AND  SUCH  MEMBERS'  SPOUSES,  CHILDREN AND ALL OTHER PERSONS
CHIEFLY  DEPENDENT  UPON  THE  MEMBERS  FOR  SUPPORT  AND   MAINTENANCE;
PROVIDED,  HOWEVER,  A FREELANCERS HEALTH PLAN SHALL NOT ESTABLISH RULES
OF ELIGIBILITY, INCLUDING CONTINUED ELIGIBILITY, OF  ANY  INDIVIDUAL  OR
DEPENDENT OF THE INDIVIDUAL BASED ON ANY OF THE FOLLOWING FACTORS:
  (1) HEALTH STATUS;
  (2) MEDICAL CONDITION;
  (3) CLAIMS EXPERIENCE;
  (4) RECEIPT OF HEALTH CARE;
  (5) MEDICAL HISTORY;
  (6) GENETIC INFORMATION;
  (7) EVIDENCE OF INSURABILITY, INCLUDING CONDITIONS ARISING OUT OF ACTS
OF DOMESTIC VIOLENCE; OR
  (8) DISABILITY.
  (Q)  THE  SUPERINTENDENT MAY PROMULGATE SUCH REGULATIONS AS THE SUPER-
INTENDENT DEEMS NECESSARY TO IMPLEMENT THE PROVISIONS  OF  THIS  SECTION
AND  TO  ENSURE THAT THE PLANS ESTABLISHED UNDER THIS SECTION ARE IN THE
BEST INTERESTS  OF  MEMBERS  OF  THE  FREELANCERS  ASSOCIATION  AND  THE
MEMBER'S  SPOUSE,  CHILDREN AND OTHER PERSONS CHIEFLY DEPENDENT UPON THE
MEMBERS FOR SUPPORT AND MAINTENANCE.
  (R) EXCEPT AS OTHERWISE PROVIDED  IN  THIS  SECTION,  ANY  FREELANCERS
ASSOCIATION THAT VIOLATES THIS SECTION SHALL BE SUBJECT TO THE PENALTIES
SET FORTH IN SECTION ONE HUNDRED NINE OF THIS CHAPTER.

S. 4526--A                          8

  (S)  NOTWITHSTANDING  ANYTHING  TO  THE  CONTRARY IN THIS SECTION, ANY
ACTIVITIES THAT MAY OR MUST BE CARRIED OUT BY A FREELANCERS  ASSOCIATION
UNDER THIS SECTION MAY BE CARRIED OUT ON BEHALF OF THE FREELANCERS ASSO-
CIATION  BY ANOTHER ENTITY WHOLLY OWNED OR CONTROLLED BY THE FREELANCERS
ASSOCIATION,  PROVIDED  THAT ANY ACTIVITIES CARRIED OUT ON BEHALF OF THE
FREELANCERS ASSOCIATION BY ANOTHER ENTITY WHOLLY OWNED OR CONTROLLED  BY
THE  FREELANCERS  ASSOCIATION SHALL BE SUBJECT TO ALL PROVISIONS OF THIS
SECTION.
  S 2. Subsections (b) and (c) of section 4237-a of the  insurance  law,
as  amended  by  chapter 246 of the laws of 2012, are amended to read as
follows:
  (b) "Stop-loss insurance" means an insurance policy whereby the insur-
er agrees to pay claims or indemnify an  employer  for  losses  incurred
under  a  self-insured employee benefit plan or a student health plan as
authorized by section one thousand one hundred twenty-four of this chap-
ter, OR THE FREELANCERS HEALTH PLAN DEMONSTRATION PROGRAM AS  AUTHORIZED
BY  SECTION  ONE  THOUSAND  ONE  HUNDRED TWENTY-FIVE OF THIS CHAPTER, in
excess of specified loss limits for individual  claims  and/or  for  all
claims combined, or any similar arrangement.
  (c)  A  stop-loss  insurance policy delivered, issued for delivery, or
entered into in this state shall clearly describe:
  (1) the entire money or other consideration for the policy;
  (2) the time at which the insurance takes effect and terminates;
  (3) the specified per-claim, per-employee or, in the case of a student
health plan under section one thousand one hundred twenty-four  of  this
chapter,  per  student,  OR  IN  THE CASE OF THE FREELANCERS HEALTH PLAN
DEMONSTRATION PROGRAM UNDER SECTION ONE THOUSAND ONE HUNDRED TWENTY-FIVE
OF THIS CHAPTER, PER MEMBER, or aggregate amount of claims  above  which
payment or reimbursement is to be made by the insurer; and
  (4)  the  payments  to be made by the insurer once the specified stop-
loss thresholds have been exceeded.
  S 3. Subsection (k) of section 1108 of the insurance law, as added  by
chapter  246 of the laws of 2012, is relettered subsection (l) and a new
subsection (m) is added to read as follows:
  (M) A FREELANCERS ASSOCIATION, AS DEFINED IN SECTION ONE THOUSAND  ONE
HUNDRED TWENTY-FIVE OF THIS ARTICLE, THAT OBTAINS AND MAINTAINS A DEMON-
STRATION  PROGRAM  WAIVER  FROM THE SUPERINTENDENT AND COMPLIES WITH THE
REQUIREMENTS OF SECTION ONE THOUSAND ONE  HUNDRED  TWENTY-FIVE  OF  THIS
ARTICLE, TO THE EXTENT THEREIN STATED.
  S  4.  This  act shall take effect immediately and shall expire and be
deemed repealed December 31, 2014.

Co-Sponsors

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S4526B (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A6519B
Law Section:
Insurance Law
Laws Affected:
Add §1125, amd §§4237-a & 1108, Ins L

S4526B (ACTIVE) - Bill Texts

view summary

Creates the freelancers health plan demonstration program; provides that such program would be a self-funded plan maintained by an association for the purpose of providing medical, surgical, or hospital services to independent workers; provides for an expiration of December 31, 2014.

view sponsor memo
BILL NUMBER:S4526B

TITLE OF BILL: An act to amend the insurance law, in relation to
creating the freelancers health plan demonstration program; and
providing for the repeal of such provisions upon expiration thereof

PURPOSE:

This bill would allow the previously authorized and extended
freelancers demonstration program to run to its expiration date of
December 31, 2014.

SUMMARY OF PROVISIONS:

This bill would allow for the continuation of the freelancers
demonstration program and permit 25,000 currently insured independent
workers to maintain their health benefits through December 2014. The
bill is modeled on previously enacted legislation for student health
plans sponsored by New York State independent universities and would
safeguard members' health coverage by allowing them to move their
coverage from Freelancers Insurance Company (FIC), an article 42
licensed insurance company, to a newly created self-insured health
fund called Freelancers Health Plan, which would continue to offer
eligible Freelancers Union members affordable health benefit plans.
Freelancers Health Plan would be regulated by the Department of
Financial Services and would be required to follow most of the same
rules and regulations as a non-profit health insurer established
pursuant to Article 43 of the Insurance law, including complying with
stringent consumer protection provisions, minimum reserve requirements
and financial reporting. The Plan would offer at least one plan that
complies with the ACA metal tier requirements and, upon approval from
CMS, its offerings would be considered Minimum Essential Coverage. In
addition, the legislation would subject Freelancers Union to the
penalties established pursuant to section 109 of the Insurance Law
should the Freelancers Union violate the provisions of this bill. The
legislation would maintain the existing demonstration program's
current sunset date of December 31, 2014.

JUSTIFICATION:

In 2009, New York State authorized a demonstration program through
2013 providing health insurance coverage to independent workers, a
constituency which historically has had limited access to affordable,
comprehensive health benefits. Freelancers Insurance Company (FIC) was
created to serve independent workers who, unlike the majority of
workers, are unable to access health benefits from a traditional
employer. In. 2012, two years after the ACA was enacted, the
legislature extended the sunset date to December 31, 2014 to allow FIC
members one full year to acclimate to the new landscape created by the
ACA. Today, more than 25,000 Freelancers Union members and their
dependents receive affordable health insurance from FIC, a health
insurance company wholly owned by Freelancers Union. FIC premiums are
on average 40% less than plans available in the individual and group
markets in New York City and last year FIC had a 0% premium increase
across all plans, well below the 9.6% average increase for small group
plans in New York State. Additionally, as of November 2012, FIC


members can access free primary care and preventative services through
a state of the art medical home located in Downtown Brooklyn.

FIC is currently is licensed as an Article 42 insurance company and as
such is regulated by DFS. Effective January 1, 2014, the ACA, as
specified in recently promulgated CMS rules, will require health
insurers participating in the individual or small group market in a
state to offer insurance to all individuals or groups in that state,
to offer coverage that fits within narrow actuarial value ranges and
to participate in various risk sharing pools. The ACA failed to
incorporate any exceptions to these requirements for existing
insurance demonstration programs such as FIC that were designed to
make affordable coverage available to independent workers with middle
incomes. The obligations imposed under the ACA will impose severe
hardship on FTC members, jeopardizing their ability to continue to
obtain affordable coverage. Most importantly, FIC's actuaries estimate
that application of the ACA would force FIC to raise premiums by _%,
an average of $178 per member per month.

FTC members are a unique class of New Yorkers who historically have
faced difficulty obtaining affordable health coverage. The majority of
FIC members are middle class (annual incomes of -$50,000 to $100,000
for a family of four) and all members have no access to health
insurance through a traditional employer relationship. They are not
positioned favorably to purchase insurance through the exchanges
since, as middle income earners, most of them will not be eligible for
tax subsidies under the ACA and they have no employer relationship to
fall back on. As such, FIC provides a needed service to middle class
working New Yorkers that cannot be easily replicated. The bill would
allow members of FIC to continue to receive their existing benefits
for one year after implementation of the ACA reforms, as originally
contemplated by the Legislature.

LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:

None.

EFFECTIVE DATE:

Immediately and shall expire and be deemed repealed on December 31,
2014.

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

                                 4526--B

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              April 8, 2013
                               ___________

Introduced  by  Sens.  HANNON,  SAVINO, BRESLIN, AVELLA, HOYLMAN -- read
  twice and ordered printed, and when printed to  be  committed  to  the
  Committee  on Insurance -- committee discharged, bill amended, ordered
  reprinted as amended and recommitted to said  committee  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN ACT to amend the insurance law, in relation to creating the freelanc-
  ers health plan demonstration 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. The insurance law is amended by adding a new  section  1125
to read as follows:
  S  1125.  FREELANCERS  HEALTH  PLAN  DEMONSTRATION  PROGRAM.   (A) FOR
PURPOSES OF THIS SECTION:
  (1) "FREELANCERS ASSOCIATION" MEANS AN ENTITY THAT: (A) IS EXEMPT FROM
FEDERAL TAXATION UNDER SECTION  501(C)(3)  OR  (C)(4)  OF  THE  INTERNAL
REVENUE CODE; AND (B) PRIOR TO JANUARY FIRST, TWO THOUSAND THIRTEEN, HAS
BEEN  ISSUED  ONE  OR MORE HEALTH INSURANCE POLICIES BY AN INSURER UNDER
SECTION ONE THOUSAND ONE HUNDRED TWENTY-THREE OF THIS ARTICLE.
  (2) "FREELANCERS HEALTH PLAN" OR "PLAN"  MEANS A PLAN MAINTAINED BY  A
FREELANCERS  ASSOCIATION FOR THE PURPOSE OF PROVIDING MEDICAL, SURGICAL,
OR HOSPITAL SERVICES TO INDEPENDENT WORKERS WHO ARE MEMBERS OF THE FREE-
LANCERS ASSOCIATION AND A MEMBER'S SPOUSE, CHILDREN  AND  OTHER  PERSONS
CHIEFLY DEPENDENT UPON THE MEMBER FOR SUPPORT AND MAINTENANCE.
  (3)  "INDEPENDENT WORKER" MEANS AN INDIVIDUAL WHO: (A) IS AN INDEPEND-
ENT CONTRACTOR; (B) IS SELF-EMPLOYED; (C) WORKS PART-TIME;  (D)  OBTAINS
TEMPORARY WORK THROUGH AN EMPLOYMENT AGENCY; (E) PERFORMS TEMPORARY WORK
FOR  TWO  OR MORE EMPLOYERS SIMULTANEOUSLY; (F) IS A DOMESTIC CHILD CARE
WORKER; OR (G) IS HIRED TO WORK FULL-TIME FOR A SINGLE  EMPLOYER  FOR  A
PERIOD  NOT  TO  EXCEED  EIGHTEEN MONTHS IF SUCH EMPLOYER DOES NOT OFFER

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10111-11-3

S. 4526--B                          2

GROUP HEALTH INSURANCE TO EMPLOYEES EMPLOYED ON A  TEMPORARY  BASIS.  AN
INDIVIDUAL  IS  NOT  AN  INDEPENDENT  WORKER  IF  HE  OR SHE IS EMPLOYED
FULL-TIME BY A SINGLE EMPLOYER, WITH THE EXCEPTION OF AN INDIVIDUAL  WHO
MEETS  THE  REQUIREMENTS  OF  SUBPARAGRAPH (D), (F) OR (G) OF THIS PARA-
GRAPH.
  (4) "MEMBER CONTRACT" MEANS EVIDENCE OF COVERAGE FURNISHED TO AN INDE-
PENDENT WORKER WHO IS A MEMBER OF A FREELANCERS  ASSOCIATION  THAT  SETS
FORTH ALL BENEFITS AND TERMS AND CONDITIONS WITH REGARD TO A FREELANCERS
HEALTH PLAN.
  (5)  "QUALIFIED  ACTUARY"  MEANS  AN  ACTUARY  WHO IS A MEMBER IN GOOD
STANDING OF THE AMERICAN ACADEMY OF ACTUARIES OR SOCIETY  OF  ACTUARIES,
WITH  EXPERIENCE IN ESTABLISHING RATES FOR SELF-INSURED TRUSTS PROVIDING
HEALTH BENEFITS OR OTHER SIMILAR EXPERIENCE.
  (B) A FREELANCERS ASSOCIATION SHALL NOT ESTABLISH, MAINTAIN, OR OTHER-
WISE PARTICIPATE IN A FREELANCERS HEALTH  PLAN  UNLESS  THE  FREELANCERS
ASSOCIATION  OBTAINS  AND  MAINTAINS A DEMONSTRATION PROGRAM WAIVER FROM
THE SUPERINTENDENT PURSUANT TO THE PROVISIONS OF THIS SECTION.
  (C) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, A FREELANCERS  ASSO-
CIATION OPERATING A FREELANCERS HEALTH PLAN SHALL:
  (1) WITH THE EXCEPTION OF THE ENROLLMENT PROVISIONS AS PROVIDED FOR IN
SECTION  FOUR  THOUSAND  THREE  HUNDRED  SEVENTEEN  OF  THIS CHAPTER AND
STABILIZATION OF HEALTH INSURANCE MARKETS AND PREMIUM RATES AS  PROVIDED
FOR  IN SECTION THREE THOUSAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER,
BE SUBJECT TO THE SAME PROVISIONS  AND  REQUIREMENTS  OF  A  CORPORATION
ORGANIZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; AND
  (2) PROVIDE THAT ITS PLAN WILL HAVE AN EXPECTED LOSS RATIO OF NOT LESS
THAN  EIGHTY-TWO PERCENT. IN REVIEWING A RATE FILING OR APPLICATION BY A
PLAN, THE SUPERINTENDENT MAY  MODIFY  THE  EIGHTY-TWO  PERCENT  EXPECTED
MINIMUM  LOSS  RATIO  REQUIREMENT  IF  THE SUPERINTENDENT DETERMINES THE
MODIFICATION TO BE IN THE INTERESTS OF THE PEOPLE OF THIS  STATE  OR  IF
THE  SUPERINTENDENT DETERMINES THAT A MODIFICATION IS NECESSARY TO MAIN-
TAIN PLAN SOLVENCY. NO LATER THAN ONE  HUNDRED  TWENTY  DAYS  AFTER  THE
CLOSE  OF  A PLAN'S FISCAL YEAR, A PLAN SHALL ANNUALLY REPORT THE ACTUAL
LOSS RATIO FOR THE PREVIOUS PLAN FISCAL YEAR IN A FORMAT  ACCEPTABLE  TO
THE  SUPERINTENDENT.  IF  THE  EXPECTED  LOSS RATIO IS NOT MET, THEN THE
SUPERINTENDENT MAY DIRECT THE PLAN TO TAKE CORRECTIVE ACTION IN ADDITION
TO THE REQUIREMENTS OF SECTION FOUR THOUSAND THREE HUNDRED EIGHT OF THIS
CHAPTER; AND
  (3) INCLUDE IN ITS MEMBER CONTRACTS THAT THE MEMBER CONTRACT WILL  NOT
BE EFFECTIVE AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN; AND
  (4)   PAY   ALL   CLAIMS   UNDER  ITS  MEMBER  CONTRACTS  BY  DECEMBER
THIRTY-FIRST, TWO THOUSAND FIFTEEN.
  (D) A FREELANCERS ASSOCIATION SHALL FILE AN APPLICATION FOR  A  DEMON-
STRATION   PROGRAM  WAIVER  ON  SUCH  FORM  AS  THE  SUPERINTENDENT  MAY
PRESCRIBE, AND SHALL PROVIDE TO THE SATISFACTION OF  THE  SUPERINTENDENT
THE FOLLOWING:
  (1)  A  COPY  OF THE MEMBER CONTRACT, INCLUDING A TABLE OF THE PREMIUM
RATES CHARGED OR PROPOSED TO BE CHARGED, THAT EFFECTIVE  JANUARY  FIRST,
TWO  THOUSAND FOURTEEN, CONTAINS THE BENEFITS DESCRIBED IN PARAGRAPH ONE
OF SUBSECTION (B) OF SECTION FOUR THOUSAND THREE HUNDRED TWENTY-EIGHT OF
THIS CHAPTER AND SHALL OFFER TO ITS MEMBERS, AT A MINIMUM, A CONTRACT AT
ONE OF THE LEVELS OF COVERAGE, AS DEFINED  IN  SECTION  1302(D)  OF  THE
AFFORDABLE CARE ACT, 42 USC 18022(D);
  (2)  A  REPORT  INDICATING  THE BENEFIT PROVISIONS, PREMIUM RATES, AND
INCURRED MEDICAL LOSSES ASSOCIATED WITH  THE  FREELANCERS  ASSOCIATION'S
MEMBERS  UNDER  THE  INSURANCE POLICIES INSURING THE FREELANCERS ASSOCI-

S. 4526--B                          3

ATION'S  MEMBERS  PURSUANT  TO  SECTION   ONE   THOUSAND   ONE   HUNDRED
TWENTY-THREE  OF  THIS  ARTICLE FOR THE THREE YEARS PRIOR TO THE DATE OF
THE APPLICATION;
  (3)  THE  MOST RECENT CERTIFIED INDEPENDENTLY-AUDITED FINANCIAL STATE-
MENT FOR THE FREELANCERS ASSOCIATION;
  (4) A REPORT  PREPARED  BY  A  QUALIFIED  ACTUARY  THAT  SUPPORTS  THE
PROPOSED PREMIUMS FOR THE PLAN;
  (5)  A  COPY OF ALL AGREEMENTS BETWEEN THE FREELANCERS ASSOCIATION AND
ANY PLAN ADMINISTRATOR, WITH REGARD TO THE FREELANCERS HEALTH PLAN;
  (6) A PRO-FORMA BALANCE SHEET, INCLUDING ACTUARIALLY DETERMINED CLAIMS
LIABILITIES, AND STATEMENT OF REVENUE AND EXPENSES, INCLUDING REASONABLY
PROJECTED EXPENSES, MEDICAL  LOSSES,  AND  PREMIUMS  TO  BE  CHARGED  TO
MEMBERS OF THE PLAN;
  (7) A NARRATIVE DESCRIPTION OF:
  (A)  THE  ACCOUNTING METHODOLOGY THAT THE FREELANCERS ASSOCIATION WILL
UTILIZE, WHICH SHALL BE IN ACCORDANCE WITH  STATUTORY  ACCOUNTING  PRAC-
TICES  AND  PROCEDURES  AS  PRESCRIBED  BY APPLICABLE PROVISIONS OF THIS
CHAPTER AND REGULATIONS PROMULGATED THEREUNDER AS WOULD BE APPLICABLE TO
A CORPORATION ORGANIZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER;
  (B) BILLING AND CLAIM PAYMENT  PROCEDURES,  INCLUDING  THE  NAMES  AND
CONTACT  INFORMATION  FOR THOSE PERSONS CHARGED WITH HANDLING ACCOUNTING
AND CLAIMS ISSUES; AND
  (C) ANY COMPENSATION  THE  FREELANCERS  ASSOCIATION  WILL  RECEIVE  IN
CONNECTION WITH THE PLAN;
  (8)  A COPY OF ANY STOP-LOSS INSURANCE POLICY ISSUED OR PROPOSED TO BE
ISSUED BY AN INSURER AUTHORIZED TO  DO  THE  BUSINESS  OF  ACCIDENT  AND
HEALTH INSURANCE IN THIS STATE OR IS A HEALTH SERVICE CORPORATION ORGAN-
IZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; AND
  (9) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  (E) UPON COMPLIANCE WITH THIS SECTION, TO THE EXTENT PERMISSIBLE UNDER
FEDERAL LAW, IF A FREELANCERS ASSOCIATION SUBMITS A MATERIALLY SATISFAC-
TORY AND COMPLETE APPLICATION WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF
THIS  SECTION, THEN THE SUPERINTENDENT MAY ISSUE THE FREELANCERS ASSOCI-
ATION A DEMONSTRATION PROGRAM WAIVER THAT  IS  EFFECTIVE  ON  OR  BEFORE
JANUARY FIRST, TWO THOUSAND FOURTEEN. EVERY DEMONSTRATION PROGRAM WAIVER
SHALL  CONTAIN  THE  NAME OF THE ENTITY AND ITS HOME OFFICE ADDRESS. THE
SUPERINTENDENT SHALL REFUSE TO GRANT A DEMONSTRATION PROGRAM  WAIVER  TO
AN  APPLICANT  THAT FAILS TO MEET THE REQUIREMENTS OF THIS SECTION.  THE
SUPERINTENDENT MAY REFUSE TO ISSUE ANY DEMONSTRATION PROGRAM WAIVER  IF,
IN  THE  SUPERINTENDENT'S  JUDGMENT,  THE  REFUSAL WILL BEST PROMOTE THE
INTERESTS OF THE PEOPLE OF THIS STATE. NOTICE OF  REFUSAL  SHALL  BE  IN
WRITING  AND  SHALL    SET FORTH THE BASIS FOR REFUSAL. IF THE APPLICANT
SUBMITS A WRITTEN REQUEST WITHIN THIRTY DAYS AFTER RECEIPT OF THE NOTICE
OF REFUSAL, THEN THE SUPERINTENDENT SHALL CONDUCT A HEARING TO GIVE  THE
APPLICANT  THE  OPPORTUNITY  TO SHOW CAUSE WHY THE REFUSAL SHOULD NOT BE
MADE FINAL.
  (F) IN ORDER TO OBTAIN AND MAINTAIN A DEMONSTRATION PROGRAM WAIVER,  A
FREELANCERS ASSOCIATION SHALL:
  (1)  FILE A COMPLETE APPLICATION WITH THE SUPERINTENDENT IN ACCORDANCE
WITH SUBSECTION (D) OF THIS SECTION;
  (2) HAVE WITHIN ITS OWN ORGANIZATION ADEQUATE RESOURCES AND  COMPETENT
PERSONNEL  TO  ADMINISTER  THE  FREELANCERS  HEALTH PLAN OR, IN ORDER TO
PROVIDE SUCH ADMINISTRATIVE SERVICES, IN WHOLE OR PART, HAVE  CONTRACTED
WITH  A PERSON OR ENTITY TO SERVE AS A PLAN ADMINISTRATOR, DETERMINED BY
THE FREELANCERS ASSOCIATION TO BE QUALIFIED BASED UPON WRITTEN  DOCUMEN-
TATION  FURNISHED  TO  THE  FREELANCERS  ASSOCIATION,  PROVIDED THAT THE

S. 4526--B                          4

DOCUMENTATION  SHALL  BE  MADE  AVAILABLE  TO  THE  SUPERINTENDENT  UPON
REQUEST;
  (3)  ESTABLISH  AND  MAINTAIN  PREMIUM  RATES  SUFFICIENT  TO MEET ITS
CONTRACTUAL OBLIGATIONS AND TO  SATISFY  THE  RESERVE  REQUIREMENTS  SET
FORTH IN SUBSECTION (H) OF THIS SECTION;
  (4)  ESTABLISH  AND  MAINTAIN  A FAIR AND EQUITABLE PROCESS FOR CLAIMS
REVIEW, DISPUTE RESOLUTION, AND APPEAL PROCEDURES, INCLUDING ARBITRATION
OF REJECTED CLAIMS, AND PROCEDURES FOR HANDLING CLAIMS FOR  BENEFITS  IN
THE  EVENT OF PLAN DISSOLUTION, THAT ARE SATISFACTORY TO THE SUPERINTEN-
DENT AND ARE SUBJECT TO ARTICLE FORTY-NINE OF THIS CHAPTER;
  (5) PROVIDE MEMBERS WITH A MEMBER CONTRACT;
  (6) MAINTAIN ITS FUNCTIONS, ACTIVITIES  AND  SERVICES  UNDERTAKEN  AND
PERFORMED  PURSUANT  TO A DEMONSTRATION PROGRAM WAIVER SEPARATE FROM ANY
OTHER FUNCTION, ACTIVITY OR SERVICE THROUGH THE MAINTENANCE OF  SEPARATE
RECORDS,  REPORTS  AND  ACCOUNTS  FOR  EACH SUCH FREELANCERS ASSOCIATION
FUNCTION, ACTIVITY, OR SERVICE. THE RECORDS, REPORTS AND ACCOUNTS OF THE
FREELANCERS ASSOCIATION SHALL BE MAINTAINED SEPARATELY FROM THOSE OF ANY
OTHER PERSON OR FREELANCERS ASSOCIATION THAT IS A PARENT, SUBSIDIARY  OR
AFFILIATE OF THE FREELANCERS ASSOCIATION;
  (7) FILE ALL PLAN DOCUMENTS AND ANY AMENDMENTS THERETO WITH THE SUPER-
INTENDENT  AND  RECEIVE THE SUPERINTENDENT'S APPROVAL IN ACCORDANCE WITH
THIS SECTION; AND
  (8) PROVIDE PROMINENT, SEPARATELY STATED NOTICE TO  ALL  PLAN  PARTIC-
IPANTS  THAT  THEIR CONTRACTS WILL NOT BE EFFECTIVE AFTER DECEMBER THIR-
TY-FIRST, TWO THOUSAND FOURTEEN, AND THAT THEIR POLICIES ARE NON-RENEWA-
BLE FOR ANY PERIOD BEYOND DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN.
  (G) A  FREELANCERS  ASSOCIATION  THAT  HAS  RECEIVED  A  DEMONSTRATION
PROGRAM  WAIVER  SHALL FILE WITH THE SUPERINTENDENT, FOR THE SUPERINTEN-
DENT'S PRIOR APPROVAL, ANY AMENDMENTS TO THE MEMBER CONTRACT,  FREELANC-
ERS HEALTH PLAN, OR PREMIUM RATES CHARGED FOR THE PLAN.
  (H)(1)  A  FREELANCERS  ASSOCIATION  SHALL  ESTABLISH  AND  MAINTAIN A
RESERVE TO BE DESIGNATED AS THE STATUTORY RESERVE  FUND,  IN  AN  AMOUNT
EQUAL TO TWELVE AND ONE-HALF PER CENTUM OF THE NET PREMIUM INCOME OF THE
PLAN,  IN  ADDITION  TO  RESERVES CONSISTING OF THE AMOUNTS NECESSARY TO
SATISFY ALL CONTRACTUAL OBLIGATIONS AND LIABILITIES OF THE PLAN, INCLUD-
ING: (A) A RESERVE FOR PAYMENT OF CLAIMS AND EXPENSES  THEREON  REPORTED
BUT  NOT  YET PAID, AND CLAIMS AND EXPENSES THEREON INCURRED BUT NOT YET
REPORTED; AND (B) A RESERVE FOR UNEARNED PREMIUM  EQUIVALENTS,  COMPUTED
PRO-RATA ON THE BASIS OF THE UNEXPIRED PORTION OF THE POLICY PERIOD.
  (2) IF AT ANY TIME THE RESERVE FUNDS REQUIRED TO BE ESTABLISHED PURSU-
ANT  TO  THIS  SECTION FALL BELOW THE REQUIRED MINIMUM AMOUNTS, THEN THE
FREELANCERS ASSOCIATION SHALL IMMEDIATELY NOTIFY THE  SUPERINTENDENT  OF
SUCH  IMPAIRMENT.  THE FREELANCERS ASSOCIATION SHALL CURE THE IMPAIRMENT
WITHIN FIVE BUSINESS DAYS.
  (3) THE ASSETS CONSTITUTING THE FREELANCERS  HEALTH  PLAN'S  STATUTORY
RESERVE FUND SHALL CONSIST SOLELY OF CERTIFICATES OF DEPOSIT ISSUED BY A
UNITED STATES BANK AND PAYABLE IN UNITED STATES LEGAL TENDER, OR SECURI-
TIES  REPRESENTING INVESTMENTS OF THE TYPES SPECIFIED IN PARAGRAPHS ONE,
TWO, THREE, EIGHT, AND TEN OF SUBSECTION (A)  OF  SECTION  ONE  THOUSAND
FOUR  HUNDRED  FOUR OF THIS CHAPTER, OR AS OTHERWISE EXPRESSLY PERMITTED
BY THE SUPERINTENDENT. ANY INTEREST EARNED OR CAPITAL GAIN  REALIZED  ON
THE  MONEY  SO  DEPOSITED OR INVESTED SHALL ACCRUE TO AND BECOME PART OF
THE PLAN'S STATUTORY RESERVE FUND.
  (4) THE PLAN'S ASSETS,  LIABILITIES,  INCOME  AND  EXPENSES  SHALL  BE
ACCOUNTED  FOR  SEPARATE  AND  APART FROM ALL OTHER ASSETS, LIABILITIES,
INCOME AND EXPENSES OF THE FREELANCERS ASSOCIATION. THE  ACCOUNTING  FOR

S. 4526--B                          5

THE  PLAN'S  STATUTORY RESERVE FUND SHALL SHOW: (A) THE PURPOSE, SOURCE,
DATE AND AMOUNT OF EACH SUM PAID INTO THE FUND; (B) THE INTEREST  EARNED
BY  SUCH  FUND;  (C)  CAPITAL GAINS OR LOSSES RESULTING FROM THE SALE OF
INVESTMENTS  OF  THE  PLAN'S  STATUTORY  RESERVE  FUND;  (D)  THE ORDER,
PURPOSE, DATE AND AMOUNT OF EACH  PAYMENT  FROM  THE  STATUTORY  RESERVE
FUND;  AND (E) THE ASSETS OF THE STATUTORY RESERVE FUND, INDICATING CASH
BALANCE AND SCHEDULE OF INVESTMENTS.
  (5) THE REQUIREMENTS FOR FUNDING  OF  THE  PLAN'S  RESERVES  SHALL  BE
CALCULATED  USING  STATUTORY  ACCOUNTING PRACTICES AND PROCEDURES.  ONLY
THOSE EXPENSES THAT RELATE TO THE PLAN SHALL BE INCLUDED IN  CALCULATING
THE REQUIREMENTS FOR FUNDING OF THE PLAN'S RESERVE FUNDS. EXPENSES ALLO-
CATED TO THE PLAN SHALL BE ALLOCATED ON AN EQUITABLE BASIS IN CONFORMITY
WITH CUSTOMARY INSURANCE ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED. THE
BOOKS,  ACCOUNTS,  AND  RECORDS  OF  THE  PLAN SHALL BE MAINTAINED AS TO
CLEARLY AND ACCURATELY DISCLOSE THE NATURE AND DETAILS OF  ALL  EXPENSES
SO AS TO SUPPORT THE REASONABLENESS OF SUCH EXPENSES.
  (I)  (1)  A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT
WITHIN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF THE PLAN'S FISCAL YEAR  A
REPORT THAT CONTAINS:
  (A)  AN  ANNUAL  FINANCIAL STATEMENT, VERIFIED BY THE OATH OF AT LEAST
TWO OF THE FREELANCERS ASSOCIATION'S  PRINCIPAL  OFFICERS,  WITH  DIRECT
KNOWLEDGE  OF THE OPERATIONS OF THE FREELANCERS HEALTH PLAN, SHOWING THE
FINANCIAL CONDITION AND AFFAIRS OF  THE  PLAN  DURING  THE  MOST  RECENT
FISCAL  YEAR,  IN ACCORDANCE WITH LAW AND STATUTORY PRACTICES AND PROCE-
DURES AS ADOPTED BY THE SUPERINTENDENT, IN  A  FORM  PRESCRIBED  BY  THE
SUPERINTENDENT;
  (B)  THE IDENTITY OF THE QUALIFIED ACTUARY UTILIZED BY THE FREELANCERS
ASSOCIATION OR PLAN AND THE AMOUNT PAID TO THE QUALIFIED ACTUARY BY  THE
FREELANCERS ASSOCIATION OR PLAN DURING ITS MOST RECENT FISCAL YEAR;
  (C) THE IDENTITIES OF THE PLAN'S TEN LARGEST VENDORS BY PAYMENT AMOUNT
DURING ITS MOST RECENT FISCAL YEAR;
  (D) THE NAME AND CONTACT INFORMATION OF THE PERSON OR ENTITY APPOINTED
BY  THE  FREELANCERS  ASSOCIATION  TO  ADMINISTER THE FREELANCERS HEALTH
PLAN;
  (E) A PRO-FORMA STATEMENT OF PROJECTED REVENUE AND EXPENSES FOR HEALTH
BENEFITS ANTICIPATED BY THE PLAN FOR THE NEXT TWELVE-MONTH PERIOD OF THE
PLAN'S OPERATION, PROVIDED ON A FISCAL YEAR;
  (F) A DETAILED REPORT OF THE OPERATIONS AND CONDITION  OF  THE  PLAN'S
RESERVE FUNDS; AND
  (G) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
  (2) A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT WITH-
IN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF ITS FREELANCERS HEALTH PLAN'S
FISCAL  YEAR  THE MOST RECENT CERTIFIED, INDEPENDENTLY AUDITED FINANCIAL
STATEMENT FOR THE FREELANCERS ASSOCIATION. THE STATEMENT  SHALL  INCLUDE
AN  OPINION  OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. THE NOTES TO
THE FINANCIAL STATEMENT SHALL SHOW THE FINANCIAL RESULTS  OF  THE  FREE-
LANCERS HEALTH PLAN OPERATIONS AND A DESCRIPTION AS TO HOW THE FREELANC-
ERS  ASSOCIATION  MEETS  THE  RESERVE  REQUIREMENTS  IN PARAGRAPH ONE OF
SUBSECTION (H) OF THIS SECTION, INCLUDING THE AMOUNTS REPORTED FOR  EACH
OF  THE  RESERVES,  THE  METHOD  USED TO CALCULATE THE RESERVES, AND THE
CHANGE IN THE RESERVES FROM THE BEGINNING OF THE PLAN'S FISCAL  YEAR  TO
THE  END  OF THE PLAN'S FISCAL YEAR. IN ADDITION, THE NOTES TO FINANCIAL
STATEMENT SHALL DETAIL THE ASSETS COMPRISING THE STATUTORY RESERVE  FUND
TO  DEMONSTRATE  COMPLIANCE WITH PARAGRAPH ONE OF SUBSECTION (H) OF THIS
SECTION.

S. 4526--B                          6

  (3) A FREELANCERS ASSOCIATION SHALL FILE A REPORT WITH THE SUPERINTEN-
DENT EACH QUARTER, WITHIN FORTY-FIVE DAYS AFTER QUARTER CLOSE,  DESCRIB-
ING  THE  PLAN'S CURRENT FINANCIAL STATUS AND PROVIDING SUCH INFORMATION
AS THE SUPERINTENDENT MAY PRESCRIBE.
  (4)  A FREELANCERS ASSOCIATION THAT FAILS TO FILE ANY REPORT OR STATE-
MENT REQUIRED BY THIS CHAPTER, OR FAILS TO REPLY WITHIN THIRTY DAYS TO A
WRITTEN INQUIRY BY THE SUPERINTENDENT IN CONNECTION THEREWITH SHALL,  IN
ADDITION  TO  OTHER PENALTIES PROVIDED BY THIS CHAPTER, BE SUBJECT, UPON
NOTICE AN OPPORTUNITY TO BE HEARD, TO A PENALTY OF UP  TO  ONE  THOUSAND
DOLLARS  PER DAY OF DELAY, NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS IN
THE AGGREGATE, FOR EACH SUCH FAILURE.
  (J) THE SUPERINTENDENT MAY, PURSUANT TO SECTIONS THREE  HUNDRED  NINE,
THREE  HUNDRED  TEN,  THREE  HUNDRED ELEVEN, AND THREE HUNDRED TWELVE OF
THIS CHAPTER, AND PURSUANT TO THE FINANCIAL SERVICES LAW, MAKE AN  EXAM-
INATION INTO THE AFFAIRS OF ANY FREELANCERS ASSOCIATION WITH REGARD TO A
FREELANCERS  HEALTH PLAN ISSUED BY THE FREELANCERS ASSOCIATION, AS OFTEN
AS THE SUPERINTENDENT DEEMS IT  EXPEDIENT  FOR  THE  PROTECTION  OF  THE
INTERESTS  OF  THE PEOPLE OF THIS STATE.  THE EXPENSES OF EVERY EXAMINA-
TION OF THE AFFAIRS OF THE FREELANCERS ASSOCIATION,  WITH  REGARD  TO  A
FREELANCERS  HEALTH  PLAN  ESTABLISHED  OR MAINTAINED BY THE FREELANCERS
ASSOCIATION, SHALL BE BORNE AND PAID FOR BY THE FREELANCERS  ASSOCIATION
SO EXAMINED. THE EXPENSES OF EXAMINATION SHALL INCLUDE REIMBURSEMENT FOR
THE  COMPENSATION  PAID  FOR  SERVICES OF PERSONS EMPLOYED BY THE SUPER-
INTENDENT OR BY THE SUPERINTENDENT'S AUTHORITY TO MAKE SUCH EXAMINATION,
AND FOR THE NECESSARY TRAVELING AND LIVING EXPENSES  OF  THE  PERSON  OR
PERSONS MAKING THE EXAMINATION.
  (K)(1)  THE  SUPERINTENDENT  MAY  SUSPEND  OR  REVOKE  A DEMONSTRATION
PROGRAM WAIVER ISSUED TO A FREELANCERS ASSOCIATION IF THE SUPERINTENDENT
FINDS, AFTER NOTICE AND HEARING, THAT THE  FREELANCERS  ASSOCIATION  HAS
FAILED TO COMPLY WITH ANY REQUIREMENT IMPOSED ON IT BY THE PROVISIONS OF
THIS  CHAPTER AND IF IN THE SUPERINTENDENT'S JUDGMENT SUCH SUSPENSION OR
REVOCATION IS REASONABLY NECESSARY  TO  PROTECT  THE  INTERESTS  OF  THE
PEOPLE OF THIS STATE, INCLUDING:
  (A)  FOR  ANY  CAUSE  THAT  WOULD  BE A BASIS FOR DENIAL OF AN INITIAL
APPLICATION FOR A DEMONSTRATION PROGRAM WAIVER;
  (B) FAILURE TO MAINTAIN THE RESERVES REQUIRED  BY  SUBSECTION  (H)  OF
THIS SECTION; OR
  (C) A DETERMINATION BY THE SUPERINTENDENT THAT THE FREELANCERS ASSOCI-
ATION  HAS REFUSED TO PRODUCE ITS ACCOUNTS, RECORDS, AND FILES FOR EXAM-
INATION OR HAS REFUSED TO COOPERATE OR GIVE INFORMATION WITH RESPECT  TO
THE AFFAIRS OF THE FREELANCERS HEALTH PLAN OR TO PERFORM ANY OTHER LEGAL
OBLIGATION  RELATING  TO SUCH AN EXAMINATION WHEN REQUIRED BY THE SUPER-
INTENDENT.
  (2) ANY DEMONSTRATION PROGRAM WAIVER SUSPENDED OR REVOKED  UNDER  THIS
SUBSECTION SHALL BE SURRENDERED TO THE SUPERINTENDENT, AND THE FREELANC-
ERS  ASSOCIATION  SHALL NOTIFY ALL MEMBERS OF THAT DECISION IN SUCH FORM
AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE, BUT NOT LATER  THAN  TEN
DAYS  AFTER RECEIPT OF NOTICE OF THE SUPERINTENDENT'S DECISION REQUIRING
SUSPENSION OR REVOCATION. IN ADDITION, THE FREELANCERS ASSOCIATION SHALL
SUBMIT A PLAN FOR THE  SUPERINTENDENT'S  APPROVAL  FOR  WINDING  UP  THE
PLAN'S AFFAIRS IN AN ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT
OF  ALL  BENEFITS,  IN  SUCH  FORM  AND MANNER AS THE SUPERINTENDENT MAY
PRESCRIBE.
  (3) NOTWITHSTANDING SUBDIVISION TWO OF  SECTION  EIGHTY-SEVEN  OF  THE
PUBLIC OFFICERS LAW, ALL FINAL DECISIONS TO SUSPEND OR REVOKE THE DEMON-

S. 4526--B                          7

STRATION  PROGRAM  WAIVER WITH REGARD TO A FREELANCERS HEALTH PLAN SHALL
BE PUBLIC.
  (L)  IN  ANY  CASE  IN WHICH A FREELANCERS ASSOCIATION DETERMINES THAT
THERE IS A REASON TO BELIEVE  THAT  THE  FREELANCERS  HEALTH  PLAN  WILL
TERMINATE,  THE  FREELANCERS ASSOCIATION SHALL SO INFORM THE SUPERINTEN-
DENT AT LEAST SIXTY DAYS PRIOR THERETO, AND SHALL FILE A SWORN STATEMENT
WITH THE SUPERINTENDENT CONCERNING ALL CURRENT  AND  FUTURE  LIABILITIES
UNDER  ITS DISCONTINUED PLAN. THE FREELANCERS ASSOCIATION SHALL SUBMIT A
PLAN FOR THE SUPERINTENDENT'S APPROVAL FOR WINDING UP THE PLAN'S AFFAIRS
IN AN ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT OF  ALL  BENE-
FITS, IN SUCH FORM AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE.
  (M)  NO  PART  OF  ANY  FUNDS  OF THE FREELANCERS ASSOCIATION, AS THEY
PERTAIN TO THE FREELANCERS HEALTH PLAN, SHALL BE SUBJECT TO  THE  CLAIMS
OF GENERAL CREDITORS OF THE FREELANCERS ASSOCIATION UNTIL ALL PLAN BENE-
FITS  AND  OTHER  PLAN OBLIGATIONS HAVE BEEN SATISFIED. UNTIL SUCH TIME,
THE FREELANCERS ASSOCIATION SHALL CONTINUE  TO  MAINTAIN  AND  FUND  THE
RESERVE  FUNDS  REQUIRED  TO BE ESTABLISHED UNDER SUBSECTION (H) OF THIS
SECTION. IF AT ANY TIME THE SUPERINTENDENT  DETERMINES  THAT  ADDITIONAL
FUNDS  SHALL  BE  DEPOSITED  IN  THE RESERVE FUNDS, THEN THE FREELANCERS
ASSOCIATION SHALL MAKE THE DEPOSIT WITHIN THIRTY DAYS OF THE SUPERINTEN-
DENT'S DETERMINATION.
  (N) A FREELANCERS ASSOCIATION THAT RECEIVES  A  DEMONSTRATION  PROGRAM
WAIVER  UNDER  THIS  SECTION SHALL SUBMIT PERIODIC REPORTS TO THE SUPER-
INTENDENT SUFFICIENT TO ENABLE THE SUPERINTENDENT TO EVALUATE THE EFFEC-
TIVENESS OF THE DEMONSTRATION PROGRAM.   SUCH REPORTS  SHALL  INCLUDE  A
COMPARISON  OF  THE COST OF BENEFITS OBTAINED UNDER THE PROGRAM TO OTHER
AVAILABLE INSURANCE OPTIONS AND ANY OTHER INFORMATION  REQUIRED  BY  THE
SUPERINTENDENT.
  (O)  A  FREELANCERS  ASSOCIATION SHALL NOT ISSUE A STOP-LOSS INSURANCE
POLICY.
  (P) A FREELANCERS HEALTH PLAN SHALL PROVIDE BENEFITS ONLY TO INDEPEND-
ENT WORKERS WHO ARE MEMBERS OF THE  FREELANCERS  ASSOCIATION  SPONSORING
THE  PLAN  AND  SUCH  MEMBERS'  SPOUSES,  CHILDREN AND ALL OTHER PERSONS
CHIEFLY  DEPENDENT  UPON  THE  MEMBERS  FOR  SUPPORT  AND   MAINTENANCE;
PROVIDED,  HOWEVER,  A FREELANCERS HEALTH PLAN SHALL NOT ESTABLISH RULES
OF ELIGIBILITY, INCLUDING CONTINUED ELIGIBILITY, OF  ANY  INDIVIDUAL  OR
DEPENDENT OF THE INDIVIDUAL BASED ON ANY OF THE FOLLOWING FACTORS:
  (1) HEALTH STATUS;
  (2) MEDICAL CONDITION;
  (3) CLAIMS EXPERIENCE;
  (4) RECEIPT OF HEALTH CARE;
  (5) MEDICAL HISTORY;
  (6) GENETIC INFORMATION;
  (7) EVIDENCE OF INSURABILITY, INCLUDING CONDITIONS ARISING OUT OF ACTS
OF DOMESTIC VIOLENCE; OR
  (8) DISABILITY.
  (Q)  THE  SUPERINTENDENT MAY PROMULGATE SUCH REGULATIONS AS THE SUPER-
INTENDENT DEEMS NECESSARY TO IMPLEMENT THE PROVISIONS  OF  THIS  SECTION
AND  TO  ENSURE THAT THE PLANS ESTABLISHED UNDER THIS SECTION ARE IN THE
BEST INTERESTS  OF  MEMBERS  OF  THE  FREELANCERS  ASSOCIATION  AND  THE
MEMBER'S  SPOUSE,  CHILDREN AND OTHER PERSONS CHIEFLY DEPENDENT UPON THE
MEMBERS FOR SUPPORT AND MAINTENANCE.
  (R) EXCEPT AS OTHERWISE PROVIDED  IN  THIS  SECTION,  ANY  FREELANCERS
ASSOCIATION THAT VIOLATES THIS SECTION SHALL BE SUBJECT TO THE PENALTIES
SET FORTH IN SECTION ONE HUNDRED NINE OF THIS CHAPTER.

S. 4526--B                          8

  (S)  NOTWITHSTANDING  ANYTHING  TO  THE  CONTRARY IN THIS SECTION, ANY
ACTIVITIES THAT MAY OR MUST BE CARRIED OUT BY A FREELANCERS  ASSOCIATION
UNDER THIS SECTION MAY BE CARRIED OUT ON BEHALF OF THE FREELANCERS ASSO-
CIATION  BY ANOTHER ENTITY WHOLLY OWNED OR CONTROLLED BY THE FREELANCERS
ASSOCIATION,  PROVIDED  THAT ANY ACTIVITIES CARRIED OUT ON BEHALF OF THE
FREELANCERS ASSOCIATION BY ANOTHER ENTITY WHOLLY OWNED OR CONTROLLED  BY
THE  FREELANCERS  ASSOCIATION SHALL BE SUBJECT TO ALL PROVISIONS OF THIS
SECTION.
  S 2. Subsections (b) and (c) of section 4237-a of the  insurance  law,
as  amended  by  chapter 246 of the laws of 2012, are amended to read as
follows:
  (b) "Stop-loss insurance" means an insurance policy whereby the insur-
er agrees to pay claims or indemnify an  employer  for  losses  incurred
under  a  self-insured employee benefit plan or a student health plan as
authorized by section one thousand one hundred twenty-four of this chap-
ter, OR THE FREELANCERS HEALTH PLAN DEMONSTRATION PROGRAM AS  AUTHORIZED
BY  SECTION  ONE  THOUSAND  ONE  HUNDRED TWENTY-FIVE OF THIS CHAPTER, in
excess of specified loss limits for individual  claims  and/or  for  all
claims combined, or any similar arrangement.
  (c)  A  stop-loss  insurance policy delivered, issued for delivery, or
entered into in this state shall clearly describe:
  (1) the entire money or other consideration for the policy;
  (2) the time at which the insurance takes effect and terminates;
  (3) the specified per-claim, per-employee or, in the case of a student
health plan under section one thousand one hundred twenty-four  of  this
chapter,  per  student,  OR  IN  THE CASE OF THE FREELANCERS HEALTH PLAN
DEMONSTRATION PROGRAM UNDER SECTION ONE THOUSAND ONE HUNDRED TWENTY-FIVE
OF THIS CHAPTER, PER MEMBER, or aggregate amount of claims  above  which
payment or reimbursement is to be made by the insurer; and
  (4)  the  payments  to be made by the insurer once the specified stop-
loss thresholds have been exceeded.
  S 3. Subsection (k) of section 1108 of the insurance law, as added  by
chapter  246 of the laws of 2012, is relettered subsection (l) and a new
subsection (m) is added to read as follows:
  (M) A FREELANCERS ASSOCIATION, AS DEFINED IN SECTION ONE THOUSAND  ONE
HUNDRED TWENTY-FIVE OF THIS ARTICLE, THAT OBTAINS AND MAINTAINS A DEMON-
STRATION  PROGRAM  WAIVER  FROM THE SUPERINTENDENT AND COMPLIES WITH THE
REQUIREMENTS OF SECTION ONE THOUSAND ONE  HUNDRED  TWENTY-FIVE  OF  THIS
ARTICLE, TO THE EXTENT THEREIN STATED.
  S  4.  This  act shall take effect immediately and shall expire and be
deemed repealed December 31, 2014.

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