S T A T E O F N E W Y O R K
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9248
I N A S S E M B L Y
February 4, 2016
___________
Introduced by M. of A. SEAWRIGHT -- read once and referred to the
Committee on Insurance
AN ACT to amend the insurance law, in relation to catastrophic or rein-
surance coverage issued to certain small groups; to amend a chapter of
the laws of 2015 amending the insurance law relating to catastrophic
or reinsurance coverage issued to certain small groups, as proposed in
legislative bills numbers S. 6004 and A. 8300, in relation to the
effectiveness of such chapter; and in relation to directing the super-
intendent of financial services to contract with an independent entity
to conduct an assessment regarding the impact of the prohibition on
the sale of stop loss, catastrophic and reinsurance coverage to the
small group market; to amend a chapter of the laws of 2015 amending
the insurance law relating to catastrophic or reinsurance coverage
issued to certain small groups, as proposed in legislative bills
numbers S.5928-A and A.8134-A, in relation to the effectiveness of
such chapter; and to repeal section 4 of a chapter of the laws of 2015
amending the insurance law relating to catastrophic or reinsurance
coverage issued to certain small groups, as proposed in legislative
bills numbers S. 6004 and A. 8300, relating thereto
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Paragraph 1 of subsection (h) of section 3231 of the insur-
ance law, as amended by a chapter of the laws of 2015 amending the
insurance law relating to catastrophic or reinsurance coverage issued to
certain small groups, as proposed in legislative bills numbers S.6004
and A.8300, is amended to read as follows:
(1) Notwithstanding any other provision of this chapter, no insurer,
subsidiary of an insurer, or controlled person of a holding company
system may act as an administrator or claims paying agent, as opposed to
an insurer, on behalf of small groups which, if they purchased insur-
ance, would be subject to this section. No insurer[, subsidiary of an
insurer, or controlled person of a holding company] may provide stop
loss, catastrophic or reinsurance coverage to small groups which, if
they purchased insurance, would be subject to this section. Provided,
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11569-16-6
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however, the provisions of this paragraph shall not apply to: (A) THE
RENEWAL OF stop loss, catastrophic or reinsurance coverage issued and in
effect on [or before] January first, two thousand fifteen to small
groups covering between fifty-one and one hundred employees or members
of the group; AND (B) THE ISSUANCE BETWEEN JANUARY FIRST, TWO THOUSAND
SIXTEEN AND DECEMBER THIRTY-FIRST, TWO THOUSAND SIXTEEN, OF STOP LOSS,
CATASTROPHIC OR REINSURANCE COVERAGE, AND ANY RENEWAL THEREOF, TO A
SMALL GROUP COVERING BETWEEN FIFTY-ONE AND ONE HUNDRED EMPLOYEES OR
MEMBERS OF THE GROUP, PROVIDED THAT SUCH GROUP HAD STOP LOSS,
CATASTROPHIC OR REINSURANCE COVERAGE ISSUED AND IN EFFECT ON JANUARY
FIRST, TWO THOUSAND FIFTEEN.
S 2. Paragraph 1 of subsection (e) of section 4317 of the insurance
law, as amended by a chapter of the laws of 2015 amending the insurance
law relating to catastrophic or reinsurance coverage issued to certain
small groups, as proposed in legislative bills numbers S.6004 and
A.8300, is amended to read as follows:
(1) Notwithstanding any other provision of this chapter, no insurer,
subsidiary of an insurer, or controlled person of a holding company
system may act as an administrator or claims paying agent, as opposed to
an insurer, on behalf of small groups which, if they purchased insur-
ance, would be subject to this section. No insurer[, subsidiary of an
insurer, or controlled person of a holding company] may provide stop
loss, catastrophic or reinsurance coverage to small groups which, if
they purchased insurance, would be subject to this section. Provided,
however, the provisions of this paragraph shall not apply to: (A) THE
RENEWAL OF stop loss, catastrophic or reinsurance coverage issued and in
effect on [or before] January first, two thousand fifteen to small
groups covering between fifty-one and one hundred employees or members
of the group; AND (B) THE ISSUANCE BETWEEN JANUARY FIRST, TWO THOUSAND
SIXTEEN, AND DECEMBER THIRTY-FIRST, TWO THOUSAND SIXTEEN, OF STOP LOSS,
CATASTROPHIC OR REINSURANCE COVERAGE, AND ANY RENEWAL THEREOF, TO A
SMALL GROUP COVERING BETWEEN FIFTY-ONE AND ONE HUNDRED EMPLOYEES OR
MEMBERS OF THE GROUP, PROVIDED THAT SUCH GROUP HAD STOP LOSS,
CATASTROPHIC OR REINSURANCE COVERAGE ISSUED AND IN EFFECT ON JANUARY
FIRST, TWO THOUSAND FIFTEEN.
S 3. Paragraph 1 of subsection (g) of section 3231 of the insurance
law, as amended by a chapter of the laws of 2015 amending the insurance
law relating to catastrophic or reinsurance coverage issued to certain
small groups, as proposed in legislative bills numbers S.5928-A and
A.8134-A, is amended to read as follows:
(1) (A) This section shall also apply to policies issued to a group
defined in subsection (c) of section four thousand two hundred thirty-
five of this chapter, including but not limited to an association or
trust of employers, if the group includes one or more member employers
or other member groups [which have fifty] HAVING ONE HUNDRED or fewer
employees or members exclusive of spouses and dependents. For [policies]
A POLICY issued or renewed on or after January first, two thousand four-
teen, if the group includes one or more member small group employers
eligible for coverage subject to this section, then such member employ-
ers shall be classified as small groups for rating purposes and the
remaining members shall be rated consistent with the rating rules appli-
cable to such remaining members pursuant to paragraph two of this
subsection. [Provided, however this subsection shall not apply to groups
which have been issued a policy on or before July first, two thousand
fifteen, and have member employers, who, on or after such date, have
between fifty-one and one hundred employees, exclusive of spouses and
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dependents, and] (B) SUBPARAGRAPH A OF THIS PARAGRAPH SHALL NOT APPLY TO
EITHER THE RENEWAL OF A POLICY ISSUED TO A GROUP OR THE ISSUANCE,
BETWEEN JANUARY FIRST, TWO THOUSAND SIXTEEN AND DECEMBER THIRTY-FIRST,
TWO THOUSAND SIXTEEN, OF A POLICY, AND ANY RENEWAL THEREOF, TO A GROUP,
PROVIDED THAT THE FOLLOWING THREE REQUIREMENTS ARE MET: (I) THE GROUP
HAD BEEN ISSUED A POLICY THAT WAS IN EFFECT ON JULY FIRST, TWO THOUSAND
FIFTEEN; (II) THE GROUP HAD MEMBER EMPLOYERS, WHO, ON OR AFTER JULY
FIRST, TWO THOUSAND FIFTEEN, HAVE BETWEEN FIFTY-ONE AND ONE HUNDRED
EMPLOYEES, EXCLUSIVE OF SPOUSES AND DEPENDENTS; AND (III) the group is
either: (i) [organized pursuant to article five-G of the general munic-
ipal law and is] comprised entirely of one or more municipal corpo-
rations or districts (as such terms are defined in section one hundred
nineteen-n of the general municipal law); or (ii) comprised entirely of
nonpublic schools providing education in any grade from pre-kindergarten
through twelfth grade. [For such groups which have been issued a policy
on or before July first, two thousand fifteen, the applicability of this
subsection shall continue irrespective of whether the group selects a
policy from a different insurer or if the member employer selects a
different group for such coverage.]
S 4. Paragraph 1 of subsection (d) of section 4317 of the insurance
law, as amended by a chapter of the laws of 2015 amending the insurance
law relating to catastrophic or reinsurance coverage issued to certain
small groups, as proposed in legislative bills numbers S.5928-A and
A.8134-A, is amended to read as follows:
(1) (A) This section shall also apply to a contract issued to a group
defined in subsection (c) of section four thousand two hundred thirty-
five of this chapter, including but not limited to an association or
trust of employers, if the group includes one or more member employers
or other member groups [which have fifty] HAVING ONE HUNDRED or fewer
employees or members exclusive of spouses and dependents. For
[contracts] A CONTRACT issued or renewed on or after January first, two
thousand fourteen, if the group includes one or more member small group
employers eligible for coverage subject to this section, then such
member employers shall be classified as small groups for rating purposes
and the remaining members shall be rated consistent with the rating
rules applicable to such remaining members pursuant to paragraph two of
this subsection. [Provided, however this subsection shall not apply to
groups which have been issued a policy on or before July first, two
thousand fifteen, and have member employers, who, on or after such date,
have between fifty-one and one hundred employees, exclusive of spouses
and dependents, and] (B) SUBPARAGRAPH A OF THIS PARAGRAPH SHALL NOT
APPLY TO EITHER THE RENEWAL OF A CONTRACT ISSUED TO A GROUP OR THE ISSU-
ANCE, BETWEEN JANUARY FIRST, TWO THOUSAND SIXTEEN AND DECEMBER
THIRTY-FIRST, TWO THOUSAND SIXTEEN, OF A CONTRACT, AND ANY RENEWAL THER-
EOF, TO A GROUP, PROVIDED THAT THE FOLLOWING THREE REQUIREMENTS ARE MET:
(I) THE GROUP HAD BEEN ISSUED A CONTRACT THAT WAS IN EFFECT ON JULY
FIRST, TWO THOUSAND FIFTEEN; (II) THE GROUP HAD MEMBER EMPLOYERS, WHO,
ON OR AFTER JULY FIRST, TWO THOUSAND FIFTEEN, HAVE BETWEEN FIFTY-ONE AND
ONE HUNDRED EMPLOYEES, EXCLUSIVE OF SPOUSES AND DEPENDENTS; AND (III)
the group is either: (i) [organized pursuant to article five-G of the
general municipal law and are] comprised entirely of one or more munici-
pal corporations or districts (as such terms are defined in section one
hundred nineteen-n of the general municipal law); or (ii) comprised
entirely of nonpublic schools providing education in any grade from
pre-kindergarten through twelfth grade. [For such groups which have been
issued a policy on or before July first, two thousand fifteen, the
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applicability of this subsection shall continue irrespective of whether
the group selects a policy from a different insurer or if the member
employer selects a different group for such coverage.]
S 5. Section 4 of a chapter of the laws of 2015 amending the insurance
law relating to catastrophic or reinsurance coverage issued to certain
small groups, as proposed in legislative bills numbers S.6004 and A.8300
is REPEALED.
S 6. Section 5 of a chapter of the laws of 2015 amending the insurance
law relating to catastrophic or reinsurance coverage issued to certain
small groups, as proposed in legislative bills numbers S.6004 and
A.8300, is amended to read as follows:
S 5. This act shall take effect on the same date and in the same
manner as a chapter of the laws of 2015 amending the insurance law
relating to catastrophic or reinsurance coverage issued to certain small
groups, as proposed in legislative bills numbers S.5928-A and A.8134-A,
takes effect AND SHALL BE DEEMED REPEALED THREE YEARS THEREAFTER.
S 6-a. Section 5 of a chapter of the laws of 2015 amending the insur-
ance law relating to catastrophic or reinsurance coverage issued to
certain small groups, as proposed in legislative bills numbers S.5928-A
and A.8134-A, as amended by a chapter of the laws of 2015 amending the
insurance law relating to catastrophic or reinsurance coverage issued to
certain small groups, as proposed in legislative bills numbers S.6004
and A.8300, is amended to read as follows:
S 5. This act shall take effect immediately; and shall be deemed
repealed [2] 3 years after it shall have become a law.
S 7. 1. The superintendent of financial services shall contract with
an independent entity to conduct a review and draft a report assessing
the impact of: (a) prohibiting the sale of stop loss coverage to the
expanded small group market (groups sized 51 to 100); and (b) allowing
the sale of stop loss coverage to groups that have between 51 and 100
employees or members and are exempt from paragraph 1 of subsection (h)
of section 3231 of the insurance law or paragraph 1 of subsection (e) of
section 4317 of the insurance law.
2. The report shall, to the extent information is available: (a)
assess the impact of the above mentioned actions on the ability of
employers of 51 to 100 employees to provide health insurance coverage.
Such impact analysis shall compare the financial costs to employers with
51 to 100 employees of providing health coverage through purchasing a
small group policy with providing self-funded benefit plans with stop
loss coverage; (b) set forth the impact on the premiums within the small
group comprehensive health insurance market from allowing such exempted
groups to obtain stop loss coverage, including analysis as to whether
allowing the sale of stop loss coverage to such exempted groups with
between 51 and 100 members results in adverse selection within the small
group comprehensive health insurance market by allowing such groups to
select either stop loss or a small group comprehensive health insurance
product; (c) survey and describe the number and features, including
wellness programs, of health benefit packages available to employer
purchasers of health insurance in the small group market and employers
who provide self-funded benefits; (d) compare the differences between
consumer protections provided under small group comprehensive health
insurance products and consumer protections provided under self-funded
benefit plans, including differences in limits on cost sharing, network
adequacy, patient appeal rights, consumer review of rates during the
prior approval process, examinations, audits, oversight, and insurer
solvency requirements. The preparation of the report shall include a
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review of insured rate filings, health insurance premium rating data,
small group enrollment, and surveys of employers and stop loss carriers
from New York.
3. The department of financial services shall submit its report to the
governor, the temporary president of the senate, the speaker of the
assembly, and the chairs of the senate and assembly standing committees
on insurance no later than March 1, 2018.
4. Each authorized insurer that writes stop loss coverage in this
state shall be responsible for the costs of the contract entered into
pursuant to this section, in an amount in proportion to the gross direct
stop loss premiums written or received by the insurer in this state
during the 2015 calendar year.
S 8. This act shall take effect immediately; provided, however, that
sections one, two, five and seven of this act shall take effect on the
same date and in the same manner as a chapter of the laws of 2015 amend-
ing the insurance law relating to catastrophic or reinsurance coverage
issued to certain small groups, as proposed in legislative bills numbers
S.6004 and A.8300, takes effect; provided further that sections three
and four of this act shall take effect on the same date and in the same
manner as a chapter of the laws of 2015 amending the insurance law,
relating to catastrophic or reinsurance coverage issued to certain small
groups, as proposed in legislative bills numbers S.5928-A and A.8134-A,
takes effect and further provided, however, that the amendments to
sections 3231 and 4317 of the insurance law made by sections one, two,
three and four of this act shall not affect the expiration of such
provisions and shall be deemed to expire therewith.