NY State Senate Bill S425

Archive: Last Bill Status - Passed Senate

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
Delivered to Governor
Signed/Vetoed by Governor

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Actions

view actions (16)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Feb 13, 2018	referred to insurance delivered to assembly passed senate
Jan 29, 2018	advanced to third reading
Jan 23, 2018	2nd report cal.
Jan 22, 2018	1st report cal.226
Jan 03, 2018	referred to insurance returned to senate died in assembly
Jun 19, 2017	referred to insurance delivered to assembly passed senate
Mar 22, 2017	advanced to third reading
Mar 21, 2017	2nd report cal.
Mar 20, 2017	1st report cal.429
Jan 04, 2017	referred to insurance

Votes

Co-Sponsors

S425 (ACTIVE) - Details

See Assembly Version of this Bill:: A7077
Current Committee:: Assembly Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3231 & 4317, Ins L; rpld §7, Chap 12 of 2016
Versions Introduced in Other Legislative Sessions:: 2015-2016: S7104, A10402
2019-2020: S5161, A5285
2021-2022: S3567

S425 (ACTIVE) - Summary

Amends the definition of "small group" for purposes of health insurance policies and contracts to fifty employees or fewer; and repeals provisions requiring the superintendent to conduct an impact study.

S425 (ACTIVE) - Sponsor Memo

 BILL NUMBER:  S425

 TITLE OF BILL :

An act to amend the insurance law, in relation to the definition of
small group; and to repeal section 7 of chapter 12 of the laws of 2016
relating to directing the superintendent 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 relating thereto

 PURPOSE :

To conform the insurance law definition of "small group" with the
definition of "small employer" under the recently enacted federal
Protecting Affordable Coverage for Employees (PACE) Act (Public Law
114-60, effective October 7, 2015), which amended applicable
provisions of the federal Patient Protection and Affordable Care Act
(ACA) (Public Law 111-148).

 SUMMARY OF PROVISIONS :

Section 1 amends insurance law section 3231(a)(1) to return the
definition of "small group" to 1-50 employees or members of such
group.

Section 2 amends insurance law section 3231(a)(3) to return the
definition of "small group" to 1-50 employees or members of such
group.

Section 3 amends insurance law section 3231(h)(1) to harmonize the
provisions of such subsection with the definition of "small group."

Section 4 amends insurance law section 4317(a)( I) to return the
definition of "small group" to 1-50 employees or members of such
group.

Section 5 amends insurance law section 4317(e)(1) to harmonize the
provisions of such subsection with the definition of "small group."

Section 6 amends insurance law section 3231(g)(1) to harmonize the
provisions of such subsection with the definition of "small group."

Section 7 amends insurance law section 4317(d)(1) to harmonize the
provisions of such subsection with the definition of "small group."

Section 8 repeals section 7 of chapter 12 of the laws of 2016.

Section 9 is the effective date.

 JUSTIFICATION :

The historic size of the small group market has been employers with 50
or fewer employees. State regulators, in every state, either via law
or administrative rule had established this small group size at 1-50
for their local insurance market.

The federal ACA, amongst other things, changed the definition of
"small employer" from 1-50 employees to 1-100 employees, as of January
1, 2016. As part of the passage of the State Fiscal Year

(SFY) 2013-14 New York State Budget (C.56, L. 2013), the State amended
the definition of "small group" in the NY insurance law to 1-100
employees or members, to conform with the federal ACA definition,
effective January 1, 2016.

This expansion of the definition of "small group" to 1-100 employees
or members of such group, has had the unintended consequence of
increasing the costs of health insurance coverage for groups of
51-100, by virtue of raising premium rates or subscriber costs
together with higher deductibles and co-pays, coupled with fewer
available policy choices from insurance carriers or health plans, and
narrower healthcare provider panels, both in and out of network. The
small group definitional expansion has also caused certain midsized,
self-insured groups in the 51-100 range, to lose their stop loss
insurance or catastrophic coverage, since this coverage cannot be
legally sold into the NY small group market.

Trade organizations, business groups and market participants
nationwide supported changes to the ACA that repealed this
requirement. The bipartisan PACE Act was intended to enact market
reforms to revise the ACA definition of small employer back to 1-50,
to mitigate such market disruptions in the several states. The PACE
Act passed Congress unanimously and was signed by President Obama in
the fall of 2015. Since that time, nearly every state has adjusted
either by legislation, regulation or administrative order their small
group size to remain at 50 or below. Four states have not; California,
Colorado, New York and Vermont.

This bill would obviate the foregoing problems and market disruptions
simply by conforming the definition of "small group" in the NY
insurance law with the federal definition of "small employer" under
the PACE Act, back to 1-50 employees or members. This action is
necessary to preserve a robust health insurance marketplace, inside
and outside the New York State of Health (NYSOH) Insurance Marketplace
Exchange, for all midsized employer and union groups, together with
municipal, school and library consortiums.

 LEGISLATIVE HISTORY :

S.7104 of 2016.

 FISCAL IMPLICATIONS :

None to the State.  Substantial health plan cost savings are expected
to be realized by municipalities, school districts and library
consortiums.

 EFFECTIVE DATE :
Immediately, provided however that the amendments to paragraph 1 of
subsection (g) and paragraph 1 of subsection(h) of section 3231, and
paragraph I of subsection (d) and paragraph I of subsection (e) of
section 4317 of the insurance law made by sections 6, 3, 7, and 5 of
this act respectively shall not affect the expiration and reversion of
such paragraphs and shall expire and be deemed repealed therewith.

S425 (ACTIVE) - Bill Text download pdf


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

                                   425

                       2017-2018 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 4, 2017
                               ___________

Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
  printed to be committed to the Committee on Insurance

AN ACT to amend the insurance law, in  relation  to  the  definition  of
  small group; and to repeal section 7 of chapter 12 of the laws of 2016
  relating  to  directing  the  superintendent  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 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 (a) of section 3231 of the insur-
ance law, as amended by section 69 of part D of chapter 56 of  the  laws
of 2013, is amended to read as follows:
  (1)  No  individual health insurance policy and no group health insur-
ance policy covering between one and fifty employees or members  of  the
group  [or between one and one hundred employees or members of the group
for policies issued or renewed on or after January first,  two  thousand
sixteen] exclusive of spouses and dependents, hereinafter referred to as
a  small  group,  providing  hospital and/or medical benefits, including
medicare supplemental insurance, shall be issued in  this  state  unless
such policy is community rated and, notwithstanding any other provisions
of  law, the underwriting of such policy involves no more than the impo-
sition of a pre-existing condition limitation if otherwise permitted  by
this article.
  §  2.  Paragraph  3 of subsection (a) of section 3231 of the insurance
law, as amended by section 69 of part D of chapter 56  of  the  laws  of
2013, is amended to read as follows:
  (3) Once accepted for coverage, an individual or small group cannot be
terminated  by  the insurer due to claims experience.  Termination of an
individual or small group shall be based only on  one  or  more  of  the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                      [ ] is old law to be omitted.
                                                           LBD04876-01-7

S. 425                              2

reasons  set  forth  in  subsection  (g)  of  section three thousand two
hundred sixteen or subsection (p) of section three thousand two  hundred
twenty-one  of  this  article.  Group  hospital and/or medical coverage,
including  medicare  supplemental insurance, obtained through an out-of-
state trust covering a group of fifty or fewer  employees,  [or  between
one and one hundred employees for policies issued or renewed on or after
January  first,  two thousand sixteen,] or participating persons who are
residents of this state must be community rated regardless of the  situs
of  delivery of the policy. Notwithstanding any other provisions of law,
the underwriting of such policy may involve no more than the  imposition
of a pre-existing condition limitation if permitted by this article, and
once  accepted  for  coverage,  an  individual  or small group cannot be
terminated due to claims experience. Termination  of  an  individual  or
small  group shall be based only on one or more of the reasons set forth
in subsection (p) of section three thousand two  hundred  twenty-one  of
this article.
  §  3.  Paragraph  1 of subsection (h) of section 3231 of the insurance
law, as amended by chapter 12 of the laws of 2016, 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 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  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  Decem-
ber  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.]
  § 4. Paragraph 1 of subsection (a) of section 4317  of  the  insurance
law,  as  amended  by  section 72 of part D of chapter 56 of the laws of
2013, is amended to read as follows:
  (1) No individual health insurance contract and no group health insur-
ance contract covering between one and fifty employees or members of the
group, [or between one and one hundred employees or members of the group
for policies issued or renewed on or after January first,  two  thousand
sixteen]  exclusive  of  spouses and dependents, including contracts for
which the premiums are paid by a remitting agent for a group, hereinaft-
er referred to as a small group, providing hospital and/or medical bene-
fits, including Medicare supplemental insurance, shall be issued in this
state unless such contract is community rated and,  notwithstanding  any
other  provisions  of law, the underwriting of such contract involves no
more than the imposition  of  a  pre-existing  condition  limitation  if
otherwise permitted by this article.
  §  5.  Paragraph  1 of subsection (e) of section 4317 of the insurance
law, as amended by chapter 12 of the laws of 2016, 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

S. 425                              3

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 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 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 Decem-
ber  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.]
  § 6. Paragraph 1 of subsection (g) of section 3231  of  the  insurance
law, as amended by chapter 12 of the laws of 2016, 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 having [one hundred] FIFTY or fewer employees or
members exclusive of spouses and dependents.  For  a  policy  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. [(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) comprised entirely of one
or more municipal 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.]
  §  7.  Paragraph  1 of subsection (d) of section 4317 of the insurance
law, as amended by chapter 12 of the laws of 2016, 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  employ-
ers or other member groups having [one hundred] FIFTY or fewer employees
or members exclusive of spouses and dependents. For 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

S. 425                              4

rated  consistent  with  the  rating  rules applicable to such remaining
members pursuant to paragraph two of this subsection. [(B)  Subparagraph
A  of this paragraph shall not apply to either the renewal of a contract
issued  to  a group or the issuance, between January first, two thousand
sixteen and December thirty-first, two thousand sixteen, of a  contract,
and  any  renewal thereof, 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) comprised entirely of one
or  more  municipal 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.]
  § 8. Section 7 of chapter 12 of the laws of 2016 relating to directing
the superintendent 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, is REPEALED.
  § 9. This act shall take effect immediately;  provided,  however  that
the  amendments  to  paragraph  1  of  subsection (g) and paragraph 1 of
subsection (h) of section 3231, and paragraph 1 of  subsection  (d)  and
paragraph  1 of subsection (e) of section 4317 of the insurance law made
by sections six, three, seven and five of this  act  respectively  shall
not  affect  the  expiration  and reversion of such paragraphs and shall
expire and be deemed repealed therewith.

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The New York State Senate

senate Bill S425

Sponsored By

Archive: Last Bill Status - Passed Senate

Your Voice

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Votes

Feb 13, 2018 - floor Vote

Floor Vote: Feb 13, 2018

Jan 22, 2018 - Insurance committee Vote

Insurance Committee Vote: Jan 22, 2018

Jun 19, 2017 - floor Vote

Floor Vote: Jun 19, 2017

Mar 20, 2017 - Insurance committee Vote

Insurance Committee Vote: Mar 20, 2017

Co-Sponsors

S425 (ACTIVE) - Details

S425 (ACTIVE) - Summary

S425 (ACTIVE) - Sponsor Memo

S425 (ACTIVE) - Bill Text download pdf

Comments

senate Bill S425

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Sponsored By

James L. Seward

Archive: Last Bill Status - Passed Senate

Your Voice

Actions

Votes

Feb 13, 2018 - floor Vote

Floor Vote: Feb 13, 2018

Jan 22, 2018 - Insurance committee Vote

Insurance Committee Vote: Jan 22, 2018

Jun 19, 2017 - floor Vote

Floor Vote: Jun 19, 2017

Mar 20, 2017 - Insurance committee Vote

Insurance Committee Vote: Mar 20, 2017

Co-Sponsors

Fred Akshar

George A. Amedore, Jr.

Chris Jacobs

William J. Larkin, Jr.

David J. Valesky

S425 (ACTIVE) - Details

S425 (ACTIVE) - Summary

S425 (ACTIVE) - Sponsor Memo

S425 (ACTIVE) - Bill Text download pdf

Comments