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This entry was published on 2021-08-27
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SECTION 4317
Rating of individual and small group health insurance contracts
Insurance (ISC) CHAPTER 28, ARTICLE 43
§ 4317. Rating of individual and small group health insurance
contracts. (a) (1) No individual health insurance contract and no group
health insurance 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, 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 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. (2) Any individual, and dependents of such individual, and any
small group, including all employees or group members and dependents of
employees or members, applying for individual or small group health
insurance coverage including Medicare supplemental insurance, but not
including coverage issued on or after January first, two thousand
fourteen specified in subsection (l) of section four thousand three
hundred four, and section four thousand three hundred twenty-eight of
this chapter, must be accepted at all times throughout the year for any
hospital and/or medical coverage offered by the corporation to
individuals or small groups in this state. (3) Once accepted for
coverage, an individual or small group cannot be terminated by the
insurer due to claims experience. Termination of coverage for
individuals or small groups may be based only on one or more of the
reasons set forth in subsection (c) of section four thousand three
hundred four or subsection (j) of section four thousand three hundred
five of this article. (4) For the purposes of this section, "community
rated" means a rating methodology in which the premium for all persons
covered by a policy or contract form is the same, based on the
experience of the entire pool of risks of all individuals or small
groups covered by the corporation without regard to age, sex, health
status, tobacco usage or occupation excluding those individuals of small
groups covered by Medicare supplemental insurance. For medicare
supplemental insurance coverage, "community rated" means a rating
methodology in which the premiums for all persons covered by a policy or
contract form is the same based on the experience of the entire pool of
risks covered by that policy or contract form without regard to age,
sex, health status, tobacco usage or occupation.

(b) (1) The superintendent may set standard premium tiers and standard
rating relativities between tiers applicable to all contracts subject to
this section. The superintendent may also set a standard relativity
applicable to child-only contracts issued pursuant to section 1302(f) of
the affordable care act, 42 U.S.C. § 18022(f). The relativity for
child-only contracts must be actuarially justifiable using the aggregate
experience of corporations to prevent the charging of unjustified
premiums. The superintendent may adjust such premium tiers and
relativities periodically based upon the aggregate experience of
corporations issuing contract forms subject to this section. (2) A
corporation shall establish separate community rates for individuals as
opposed to small groups. (3) If a corporation is required to issue a
contract to individual proprietors pursuant to subsection (f) of this
section, such contract shall be subject to the requirements of
subsection (a) of this section.

(c) (1) The superintendent shall permit the use of separate community
rates for reasonable geographic regions, which may, in a given case,
include a single county. The regions shall be approved by the
superintendent as part of the rate filing. The superintendent shall not
require the inclusion of any specific geographic regions within the
proposed community rated regions selected by the corporation in its rate
filing so long as the corporation's proposed regions do not contain
configurations designed to avoid or segregate particular areas within a
county covered by the corporation's community rates. (2) Beginning on
January first, two thousand fourteen, for every contract subject to this
section that provides physician services, medical, major medical or
similar comprehensive-type coverage, except for Medicare supplemental
insurance, corporations shall use standardized regions established by
the superintendent.

(d) * (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
employers or other member groups having one hundred 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
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.

* NB Effective until December 28, 2025

* (1) 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
employers or other member groups which have one hundred or fewer
employees or members exclusive of spouses and dependents. For contracts
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.

* NB Effective December 28, 2025

(2) If a contract is issued to a group defined in subsection (c) of
section four thousand two hundred thirty-five of this chapter including
association groups, that includes one or more individual or individual
proprietor members, then for rating purposes the corporation shall
include such members in its individual pool of risks in establishing
premium rates for such members.

(3) A corporation shall provide specific claims experience to a
municipal corporation, as defined in subsection (f) of section four
thousand seven hundred two of this chapter, covered by the corporation
under a community rated contract when the municipal corporation requests
its claims experience for purposes of forming or joining a municipal
cooperative health benefit plan certified pursuant to article
forty-seven of this chapter. Notwithstanding the foregoing provisions,
no corporation shall be required to provide more than three years'
claims experience to a municipal corporation making this request.

(e) * (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 insurance, 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 December 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.

* NB Effective until December 28, 2025

* (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
insurance, would be subject to this section. No insurer, subsidiary of
an insurer, or controlled person of a holding company may provide stop
loss, catastrophic or reinsurance coverage to small groups which, if
they purchased insurance, would be subject to this section.

* NB Effective December 28, 2025

(2) This subsection shall not apply to coverage insuring a plan that
was in effect on or before December thirty-first, nineteen hundred
ninety-one and was issued to a group that includes member small
employers or other member small groups, including but not limited to
association groups, provided that (A) acceptance of additional small
member employers (or other member groups comprised of fifty or fewer
employees or members, exclusive of spouses and dependents) into the
group on or after June first, nineteen hundred ninety-two and before
April first, nineteen hundred ninety-four does not exceed an amount
equal to ten percent per year of the total number of persons covered
under the group as of June first, nineteen hundred ninety-two, but
nothing in this subparagraph shall limit the addition of larger member
employers; (B) (i) after April first, nineteen hundred ninety-four, the
group thereafter accepts member small employers and member small groups
without underwriting by any more than the imposition of a pre-existing
condition limitation as permitted by this article and the cost for
participation in the group for all persons covered shall be the same
based on the experience of the entire pool of risks covered under the
entire group, without regard to age, sex, health status or occupation;
and; (ii) once accepted for coverage, an individual or small group
cannot be terminated due to claims experience; (C) the corporation has
registered the names of such groups, including the total number of
persons covered as of June first, nineteen hundred ninety-two, with the
superintendent, in a form prescribed by the superintendent, on or before
April first, nineteen hundred ninety-three and shall report annually
thereafter until such groups comply with the provisions of subparagraph
(B) of this paragraph; and (D) the types or categories of employers or
groups eligible to join the association are not altered or expanded
after June first, nineteen hundred ninety-two.

(3) A corporation may apply to the superintendent for an extension or
extensions of time beyond April first, nineteen hundred ninety-four in
which to implement the provisions of this subsection as they relate to
groups registered with the superintendent pursuant to subparagraph (C)
of paragraph two of this subsection; any such extension or extensions
may not exceed two years in aggregate duration, and the ten percent per
year limitation of subparagraph (A) of paragraph two of this subsection
shall be reduced to five percent per year during the period of any such
extension or extensions. Any application for an extension shall
demonstrate that a significant financial hardship to such group would
result from such implementation.

(f)(1) If the corporation issues coverage to an association group
(including chambers of commerce), as defined in subparagraph (K) of
paragraph one of subsection (c) of section four thousand two hundred
thirty-five of this chapter, then the corporation shall issue the same
coverage to individual proprietors who purchase coverage through the
association group as the corporation issues to groups that purchase
coverage through the association group; provided, however, that a
corporation that, on the effective date of this subsection, is issuing
coverage to individual proprietors not connected with an association
group, may continue to issue such coverage provided that the coverage is
otherwise in accordance with this subsection and all other applicable
provisions of law.

(2) For coverage purchased pursuant to this subsection through
December thirty-first, two thousand thirteen, individual proprietors
shall be classified in their own community rating category, provided
however, up to and including December thirty-first, two thousand
thirteen, the premium rate established for individual proprietors
purchased pursuant to paragraph one of this subsection shall not be
greater than one hundred fifteen percent of the rate established for the
same coverage issued to groups. Coverage purchased or renewed pursuant
to this subsection on or after January first, two thousand fourteen
shall be classified in the individual rating category.

(3) The corporation may require members of the association purchasing
health insurance to verify that all employees electing health insurance
are legitimate employees of the employers, as documented on New York
state tax form NYS-45-ATT-MN or comparable documentation. In order to be
eligible to purchase health insurance pursuant to this subsection and
obtain the same group insurance products as are offered to groups, a
sole employee of a corporation or a sole proprietor of an unincorporated
business or entity must (A) work at least twenty hours per week, (B) if
purchasing the coverage through an association group, be a member of the
association for at least sixty days prior to the effective date of the
insurance contract, and (C) present a copy of the following
documentation to the corporation or health plan administrator on an
annual basis:

(i) NYS tax form 45-ATT, or comparable documentation of active
employee status;

(ii) for an unincorporated business, the prior year's federal income
tax Schedule C for an incorporated business subject to Subchapter S with
a sole employee, federal income tax Schedule E for other incorporated
businesses with a sole employee, a W-2 annual wage statement, or federal
tax form 1099 with federal income tax Schedule F; or

(iii) for a business in business for less than one year, a cancelled
business check, a certificate of doing business, or appropriate tax
documentation; and

(iv) such other documentation as may be reasonably required by the
insurer as approved by the superintendent to verify eligibility of an
individual to purchase health insurance pursuant to this subsection.

(4) Notwithstanding the provisions of item (I) of clause (i) of
subparagraph (K) of paragraph one of subsection (c) of section four
thousand two hundred thirty-five of this chapter, for purposes of this
section, an association group shall include chambers of commerce with
less than two hundred members and which are 501C3 or 501C6
organizations.