A02868 Summary:

BILL NO    A02868 

SAME AS    Same as S 4160

SPONSOR    Schimminger (MS)

COSPNSR    Towns, DelMonte, Schroeder

MLTSPNSR   Brodsky, Galef, Gunther, Hooper, Kolb, Magee, Millman, Sweeney,
           Wright

Add Art 50 SS5001 - 5007, Ins L

Enacts the "small business health insurance act"; authorizes the issuance of
small business health insurance policies; sets forth eligibility requirements
for small business health insurance, requirements for insurers who write small
business health insurance policies, and the core benefits required to be
covered by such policies.

A02868 Actions:

BILL NO    A02868 

01/21/2009 referred to insurance
01/06/2010 referred to insurance

A02868 Votes:

A02868 Memo:

 BILL NUMBER:  A2868

 TITLE OF BILL :  An act to amend the insurance law, in relation to
authorizing the issuance of small business health insurance policies

 PURPOSE OF THE BILL : This bill would authorize the issuance of small
business health insurance policies.

 SUMMARY OF SPECIFIC PROVISIONS :
S1- Amends the Insurance Law is amended by adding a new Article 50,
which shall be known and may be cited as the "Small Business Health
Insurance Act."
S 5001 Contains the short title "Small Business Health Insurance Act."
S 5002 Sets out the legislative intent and findings.
S    5003    defines    the   terms   "small   business,"   "insurer,"
"superintendent," and "eligible employee."

S 5004 details the requirements of Small  Business  Health  Insurance,
and  requires  the  Superintendent  to ensure that all policies issued
under  this  section  meet  certain  criteria.  This  section  further
provides  that  a small business is only eligible to purchase a policy
pursuant to this act if the business  has  not  provided  health  care
coverage  within  the  6  months  preceding the effective date of this
legislation. If a small business provides health care coverage  within
the  6 months, the business becomes eligible to purchase these limited
benefit policies after 2 years.

S 5005 exempts policies issued under  this  Act  from  state  mandated
coverage  and  service,  and describes the core benefits which must be
included  in  Small  Business  Health  Insurance  policies.  The  core
benefits  include  maternity care, newborn care, and emergency medical
services. This section also states that policies must provide coverage
for ambulatory care and inpatient and  outpatient  acute  medical  and
surgical   care.   Hospital  and  medical  must  include  30  days  of
hospitalization, individual annual deductibles not  to  exceed  $2,000
and  at  least  6  physician office visits per year. This section also
contains provisions related to managed care, intended  to  lessen  the
cost  of health insurance, including:  preventive care services, prior
approval of elective hospital admissions,  second  surgical  opinions,
health  care  review services, preferred provider plans, pre-admission
testing, and annual  and  lifetime  benefit  maximums.  Finally,  this
section  allows  employers  to  select  additional  benefits, such as,
optical and dental care to be included in policies.

S 5006 would require policies issued  under  this  Act  to  contain  a
notice  stating:  "This  is  a  Small Business Limited Benefits Health
Insurance Policy as approved by the NYS Insurance Department."

S 5007 would establish reporting requirements for  the  superintendent
to  report  to  the  Legislature  concerning  the  experience of these
policies and the progress of the program.

S2-  Effective Date.

 JUSTIFICATION :
The high cost of employee health insurance packages has prevented many
New York employers, especially small firms, from offering  such  plans
to their employees. An increasing concern has focused on the number of
working  uninsured  in this state, small businesses have received much
attention in efforts to broaden access  to  health  coverage.  A  1989
survey  conducted  by  the National Federation of Independent Business
(NFIB), entitled "Small Business and Health," revealed that  over  72%
of  respondents  cite  that their business profitability prevents them
from providing health benefits to their employees.


There is growing concern among many groups, including  small  business
owners,  that  the  state's statutory mandates requiring the inclusion
of, or making available as an option, specific  health  care  coverage
and services in group health plans is contributing to elevating health
insurance  coverage,  50% declared that if health insurance costs fell
by 20% or more, they would provide it as a benefit. It  becomes  clear
that  many  small employers, even though they may want to offer health
benefits for their employees, simply cannot afford to do so.

This legislation, therefore, would create the  Small  Business  Health
Insurance  Act to enable small businesses with fewer than 50 employees
to offer a relatively low-cost, basic plan of  health  insurance  that
would  cover basic and essential health services. Such a plan would be
exempt from most of the coverages  and  services  that  NYS  currently
requires  be  included  or  made  available  in all group health plans
purchased in this state. Included in the mandatory coverage under this
bill would be maternity  care,  newborn  care  and  emergency  medical
services, among others.

Any  plans  offered  under  this  program  would  also  be  subject to
continuation and conversion rights as defined by the insurance law. In
addition, an optional benefits  package,  selected  by  the  employer,
would  be  offered  to  and  paid  for  by  interested  employees. The
extension of coverage to an employee's spouse and  dependent  children
would also be available to and paid for by the employee upon request.

The  bill  also  includes language to lessen some regulatory mandates.
For instance, small business health insurance policies  could  include
deductible  and  co-payment amount greater than those specified by the
Insurance Department regulations. This is an attempt  to  address  the
concern  that  at  least  some  of  the  high cost of health insurance
policies in NYS is due not to statutory mandates, but regulatory ones.

The program includes managed care provisions  intended  to  lower  the
cost  of  the product. It is believed that the inclusion of provisions
such as second  surgical  opinions,  preventative  care  services  and
preferred provider plans will further lower the cost of small business
health  insurance  policies.  This  legislation  will  encourage  more
employers to offer health insurance benefits to employees,  and  as  a
result,  provide  basic  coverage  for  a  greater  number of New York
residents and workers who are currently uninsured.

In conclusion, this legislation provides a safeguard  to  ensure  that
these  policies  are  not  used  by  some  small  businesses to reduce
benefits for employees who are already receiving health insurance.  If
a  small  business  has  offered health care coverage to its employees
within 6 months of this bill's  effective  date,  the  small  business
cannot  purchase policies under this act for 2 years.  This limits the
possibility  that  the  legislation  will  immediately  result  in   a
reduction of benefits for certain employees.

 PRIOR LEGISLATIVE HISTORY :
2007-2008:    a.2356/S.184;   2005-2006:   A.3684/S.2629;   2003-2004:
A.3513/S.3747; 2001-2002:  A.1067/S.5165; 1999-2000: A.396; 1997-1998:
A.2255/S.1479; 1995-1996:  A.2089/S.2161; 1993-1994: S.54-B.

 FISCAL IMPLICATIONS :  None.

 EFFECTIVE DATE : This act shall take effect on  the  forty-fifth  day
after it shall have become a law.