S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5285
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 8, 2019
                                ___________
 
 Introduced by M. of A. CRESPO -- Multi-Sponsored by -- M. of A. BARCLAY,
   HEVESI,  HUNTER,  JONES, LUPARDO, MORINELLO, RAIA, SCHIMMINGER, STECK,
   THIELE -- read once and referred 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.
              

                                                            LBD08894-01-9

 A. 5285                             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

 A. 5285                             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

 A. 5285                             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.