STATE OF NEW YORK
________________________________________________________________________
7077
2017-2018 Regular Sessions
IN ASSEMBLY
April 4, 2017
___________
Introduced by M. of A. CRESPO -- 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:
1 Section 1. Paragraph 1 of subsection (a) of section 3231 of the insur-
2 ance law, as amended by section 69 of part D of chapter 56 of the laws
3 of 2013, is amended to read as follows:
4 (1) No individual health insurance policy and no group health insur-
5 ance policy covering between one and fifty employees or members of the
6 group [or between one and one hundred employees or members of the group
7 for policies issued or renewed on or after January first, two thousand
8 sixteen] exclusive of spouses and dependents, hereinafter referred to as
9 a small group, providing hospital and/or medical benefits, including
10 medicare supplemental insurance, shall be issued in this state unless
11 such policy is community rated and, notwithstanding any other provisions
12 of law, the underwriting of such policy involves no more than the impo-
13 sition of a pre-existing condition limitation if otherwise permitted by
14 this article.
15 § 2. Paragraph 3 of subsection (a) of section 3231 of the insurance
16 law, as amended by section 69 of part D of chapter 56 of the laws of
17 2013, is amended to read as follows:
18 (3) Once accepted for coverage, an individual or small group cannot be
19 terminated by the insurer due to claims experience. Termination of an
20 individual or small group shall be based only on one or more of the
21 reasons set forth in subsection (g) of section three thousand two
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04876-01-7
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1 hundred sixteen or subsection (p) of section three thousand two hundred
2 twenty-one of this article. Group hospital and/or medical coverage,
3 including medicare supplemental insurance, obtained through an out-of-
4 state trust covering a group of fifty or fewer employees, [or between
5 one and one hundred employees for policies issued or renewed on or after
6 January first, two thousand sixteen,] or participating persons who are
7 residents of this state must be community rated regardless of the situs
8 of delivery of the policy. Notwithstanding any other provisions of law,
9 the underwriting of such policy may involve no more than the imposition
10 of a pre-existing condition limitation if permitted by this article, and
11 once accepted for coverage, an individual or small group cannot be
12 terminated due to claims experience. Termination of an individual or
13 small group shall be based only on one or more of the reasons set forth
14 in subsection (p) of section three thousand two hundred twenty-one of
15 this article.
16 § 3. Paragraph 1 of subsection (h) of section 3231 of the insurance
17 law, as amended by chapter 12 of the laws of 2016, is amended to read as
18 follows:
19 (1) Notwithstanding any other provision of this chapter, no insurer,
20 subsidiary of an insurer, or controlled person of a holding company
21 system may act as an administrator or claims paying agent, as opposed to
22 an insurer, on behalf of small groups which, if they purchased insur-
23 ance, would be subject to this section. No insurer may provide stop
24 loss, catastrophic or reinsurance coverage to small groups which, if
25 they purchased insurance, would be subject to this section. [Provided,
26 however, the provisions of this paragraph shall not apply to: (A) the
27 renewal of stop loss, catastrophic or reinsurance coverage issued and in
28 effect on January first, two thousand fifteen to small groups covering
29 between fifty-one and one hundred employees or members of the group; and
30 (B) the issuance between January first, two thousand sixteen and Decem-
31 ber thirty-first, two thousand sixteen, of stop loss, catastrophic or
32 reinsurance coverage, and any renewal thereof, to a small group covering
33 between fifty-one and one hundred employees or members of the group,
34 provided that such group had stop loss, catastrophic or reinsurance
35 coverage issued and in effect on January first, two thousand fifteen.]
36 § 4. Paragraph 1 of subsection (a) of section 4317 of the insurance
37 law, as amended by section 72 of part D of chapter 56 of the laws of
38 2013, is amended to read as follows:
39 (1) No individual health insurance contract and no group health insur-
40 ance contract covering between one and fifty employees or members of the
41 group, [or between one and one hundred employees or members of the group
42 for policies issued or renewed on or after January first, two thousand
43 sixteen] exclusive of spouses and dependents, including contracts for
44 which the premiums are paid by a remitting agent for a group, hereinaft-
45 er referred to as a small group, providing hospital and/or medical bene-
46 fits, including Medicare supplemental insurance, shall be issued in this
47 state unless such contract is community rated and, notwithstanding any
48 other provisions of law, the underwriting of such contract involves no
49 more than the imposition of a pre-existing condition limitation if
50 otherwise permitted by this article.
51 § 5. Paragraph 1 of subsection (e) of section 4317 of the insurance
52 law, as amended by chapter 12 of the laws of 2016, is amended to read as
53 follows:
54 (1) Notwithstanding any other provision of this chapter, no insurer,
55 subsidiary of an insurer, or controlled person of a holding company
56 system may act as an administrator or claims paying agent, as opposed to
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1 an insurer, on behalf of small groups which, if they purchased insur-
2 ance, would be subject to this section. No insurer may provide stop
3 loss, catastrophic or reinsurance coverage to small groups which, if
4 they purchased insurance, would be subject to this section. [Provided,
5 however, the provisions of this paragraph shall not apply to: (A) the
6 renewal of stop loss, catastrophic or reinsurance coverage issued and in
7 effect on January first, two thousand fifteen to small groups covering
8 between fifty-one and one hundred employees or members of the group; and
9 (B) the issuance between January first, two thousand sixteen, and Decem-
10 ber thirty-first, two thousand sixteen, of stop loss, catastrophic or
11 reinsurance coverage, and any renewal thereof, to a small group covering
12 between fifty-one and one hundred employees or members of the group,
13 provided that such group had stop loss, catastrophic or reinsurance
14 coverage issued and in effect on January first, two thousand fifteen.]
15 § 6. Paragraph 1 of subsection (g) of section 3231 of the insurance
16 law, as amended by chapter 12 of the laws of 2016, is amended to read as
17 follows:
18 (1) [(A)] This section shall also apply to policies issued to a group
19 defined in subsection (c) of section four thousand two hundred thirty-
20 five of this chapter, including but not limited to an association or
21 trust of employers, if the group includes one or more member employers
22 or other member groups having [one hundred] fifty or fewer employees or
23 members exclusive of spouses and dependents. For a policy issued or
24 renewed on or after January first, two thousand fourteen, if the group
25 includes one or more member small group employers eligible for coverage
26 subject to this section, then such member employers shall be classified
27 as small groups for rating purposes and the remaining members shall be
28 rated consistent with the rating rules applicable to such remaining
29 members pursuant to paragraph two of this subsection. [(B) Subparagraph
30 A of this paragraph shall not apply to either the renewal of a policy
31 issued to a group or the issuance, between January first, two thousand
32 sixteen and December thirty-first, two thousand sixteen, of a policy,
33 and any renewal thereof, to a group, provided that the following three
34 requirements are met: (I) the group had been issued a policy that was in
35 effect on July first, two thousand fifteen; (II) the group had member
36 employers, who, on or after July first, two thousand fifteen, have
37 between fifty-one and one hundred employees, exclusive of spouses and
38 dependents; and (III) the group is either: (i) comprised entirely of one
39 or more municipal corporations or districts (as such terms are defined
40 in section one hundred nineteen-n of the general municipal law); or (ii)
41 comprised entirely of nonpublic schools providing education in any grade
42 from pre-kindergarten through twelfth grade.]
43 § 7. Paragraph 1 of subsection (d) of section 4317 of the insurance
44 law, as amended by chapter 12 of the laws of 2016, is amended to read as
45 follows:
46 (1) [(A)] This section shall also apply to a contract issued to a
47 group defined in subsection (c) of section four thousand two hundred
48 thirty-five of this chapter, including but not limited to an association
49 or trust of employers, if the group includes one or more member employ-
50 ers or other member groups having [one hundred] fifty or fewer employees
51 or members exclusive of spouses and dependents. For a contract issued or
52 renewed on or after January first, two thousand fourteen, if the group
53 includes one or more member small group employers eligible for coverage
54 subject to this section, then such member employers shall be classified
55 as small groups for rating purposes and the remaining members shall be
56 rated consistent with the rating rules applicable to such remaining
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1 members pursuant to paragraph two of this subsection. [(B) Subparagraph
2 A of this paragraph shall not apply to either the renewal of a contract
3 issued to a group or the issuance, between January first, two thousand
4 sixteen and December thirty-first, two thousand sixteen, of a contract,
5 and any renewal thereof, to a group, provided that the following three
6 requirements are met: (I) the group had been issued a contract that was
7 in effect on July first, two thousand fifteen; (II) the group had member
8 employers, who, on or after July first, two thousand fifteen, have
9 between fifty-one and one hundred employees, exclusive of spouses and
10 dependents; and (III) the group is either: (i) comprised entirely of one
11 or more municipal corporations or districts (as such terms are defined
12 in section one hundred nineteen-n of the general municipal law); or (ii)
13 comprised entirely of nonpublic schools providing education in any grade
14 from pre-kindergarten through twelfth grade.]
15 § 8. Section 7 of chapter 12 of the laws of 2016 relating to directing
16 the superintendent of financial services to contract with an independent
17 entity to conduct an assessment regarding the impact of the prohibition
18 on the sale of stop loss, catastrophic and reinsurance coverage to the
19 small group market, is REPEALED.
20 § 9. This act shall take effect immediately; provided, however that
21 the amendments to paragraph 1 of subsection (g) and paragraph 1 of
22 subsection (h) of section 3231, and paragraph 1 of subsection (d) and
23 paragraph 1 of subsection (e) of section 4317 of the insurance law made
24 by sections six, three, seven and five of this act respectively shall
25 not affect the expiration and reversion of such paragraphs and shall
26 expire and be deemed repealed therewith.