The New York State Senate

certain small groups, as amended by chapter 202 of the laws of 2019 is
amended to be made permanent.

Section 2. Section 5 of chapter 588 of the laws of 2015, amending the
insurance law relating to catastrophic or reinsurance coverage issued to
certain small groups, as amended by chapter 202 of the laws of 2019 is
amended to be made permanent.

 
JUSTIFICATION:

Prior to the passage of the Affordable Care Act (ACA), New York State
law allowed employers with fifty or more eligible individuals to join
together in various forms to purchase experience rated health insurance
coverage for their employees and participate in Health Insurance Consor-
tiums or Trusts.

Upon passage of the ACA, each state was required to redefine a "small
group employer" to 1-100 from the current definition of 1-50. In 2015,
New York State changed its definition of a 'small group employer' to
mean one to one hundred employees. According the law, among other
restrictions, any employer falling below the one hundred employee thres-
hold would no longer have the ability to participate in an experience
rated health insurance plan and instead must participate in a community
rated plan.

It is estimated that approximately 100 districts have between 51-100
members. If impacted districts were forced out of their health care
consortiums they would have to go to the small group market which would
significantly increased their health care costs. Not only are the
districts with 51-100 members impacted, but so are all those remaining
in their consortiums because they will likely have to pay more as there
will be less members in their consortium.

Because of the significant financial and operational impact this change
would have caused for affected districts, several laws have been enacted
that have allowed districts to remain in their health care consortiums
on a temporary basis.

Although the enactment of these laws have provided a significant benefit
to the impacted school districts by allowing them to remain in their
Health Insurance Consortiums, the current exemption is scheduled to
sunset in 2021.

School districts are already in the process of developing their 2021
budgets. By making this exemption permanent school districts will have
the benefit of additional cost certainty while providing the quality
affordable health care school districts have come to expect.

 
LEGISLATIVE HISTORY:

2015 -Chapter 588 & 589

2016 - Chapter 12

2017 - Chapter 370

2018 - Chapter 457

2019 - Chapter 202

 
FISCAL IMPLICATIONS:

Unknown

 
EFFECTIVE DATE:
This act shall take effect immediately.