S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8850--A
 
                             I N  S E N A T E
 
                               May 24, 2018
                                ___________
 
 Introduced  by  Sen.  HANNON -- read twice and ordered printed, and when
   printed to be committed  to  the  Committee  on  Health  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN ACT to amend the public health law, in relation to excess reserves of
   certain  health  maintenance  organizations; and to amend subpart B of
   part FFF of chapter 59 of the laws of 2018 amending the public  health
   law  relating  to  authorizing  the commissioner of health to redeploy
   excess reserves of certain not-for-profit managed care  organizations,
   in relation to the effectiveness thereof
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 2 of section 4416 of the public health law,  as
 added by section 1 of subpart B of part FFF of chapter 59 of the laws of
 2018, is amended to read as follows:
   2.  Except  for  any  public  benefit corporation, the commissioner is
 authorized to promulgate regulations establishing a presumptive  reserve
 ceiling  for  any  comprehensive  health  services plan issued a special
 purpose  certificate  of  authority  under  section  forty-four  hundred
 three-a  of this article that satisfies the definition of corporation in
 subparagraph five of paragraph (a) of section one  hundred  two  of  the
 not-for-profit  corporation  law  or  that is exempt from taxation under
 section 501 of the Internal Revenue Code of 1986. Such regulations shall
 express the presumptive reserve ceiling as a percentage of  the  minimum
 contingent reserves applicable to such health maintenance organizations.
 The  presumptive  reserve  ceiling  shall be DEFINED AS no less than one
 hundred fifty percent of the minimum contingent reserves  applicable  to
 such  plans.  In  the event that the commissioner determines that a plan
 subject to this subdivision has reserves in excess  of  the  presumptive
 reserve  ceiling for two consecutive quarters, the commissioner may make
 a preliminary determination that all or a portion of  such  reserves  in
 excess  of  the  ceiling  should be redeployed by depositing such excess
 reserves in the health care transformation fund pursuant to  subdivision
 three  of this section. Prior to making a preliminary determination, the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD16062-03-8

 S. 8850--A                          2
 
 commissioner shall consider whether such redeployment is consistent with
 financial soundness and efficiency and  to  the  extent  to  which  such
 reserves  are being maintained consistent with the programmatic goals of
 the state.  Upon making such a preliminary determination, the department
 shall  notify  the plan and the plan shall be afforded an opportunity to
 submit information to the department to justify  why  such  reserves  in
 excess  of  the  ceiling  are necessary and should not be so redeployed.
 Provided however, under no circumstances shall the redeployment of  such
 reserves  for  any  plan  exceed seven hundred and fifty million dollars
 annually.
   § 2. Section 4416 of the public health law is amended by adding a  new
 subdivision 5 to read as follows:
   5.  THE PROVISIONS OF SUBDIVISIONS TWO, THREE AND FOUR OF THIS SECTION
 SHALL ONLY APPLY TO  A  COMPREHENSIVE  HEALTH  SERVICES  PLAN  THAT  HAS
 RESERVES,  AS  OF  APRIL  FIRST, TWO THOUSAND EIGHTEEN, IN EXCESS OF THE
 PRESUMPTIVE RESERVE CEILING, AS SUCH TERM IS DEFINED IN SUBDIVISION  TWO
 OF THIS SECTION.
   §  3.  Section 2 of subpart B of part FFF of chapter 59 of the laws of
 2018 amending the public health law relating to authorizing the  commis-
 sioner  of  health to redeploy excess reserves of certain not-for-profit
 managed care organizations is amended to read as follows:
   § 2. This act shall take effect August 1, 2018 and shall expire and be
 deemed repealed [August 1, 2023] DECEMBER 31, 2018, but, shall not apply
 to any entity or  any  subsidiary  or  affiliate  of  such  entity  that
 disposes of all or a material portion of its assets pursuant to a trans-
 action  that:  (1)  was the subject of a request for regulatory approval
 first made to the commissioner of health between January  1,  2017,  and
 December 31, 2017; and (2) receives regulatory approval from the commis-
 sioner of health prior to July 31, 2018.
   §  4.  This  act shall take effect immediately; provided that sections
 one and two of this act shall take effect on the same date  and  in  the
 same  manner  as section 1 of subpart B of part FFF of chapter 59 of the
 laws of 2018, takes effect; and provided further that the amendments  to
 section  4416  of  the public health law made by sections one and two of
 this act shall not affect the repeal of such section and shall be deemed
 repealed therewith.