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
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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.