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A01039 Summary:

BILL NOA01039
 
SAME ASNo Same As
 
SPONSORCahill
 
COSPNSRStirpe, Hevesi, Magnarelli, Zebrowski, Steck, Quart, Friend
 
MLTSPNSRFitzpatrick
 
Amd §§3231 & 4317, Ins L
 
Redefines "small group" for the purposes of certain provisions.
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A01039 Actions:

BILL NOA01039
 
01/07/2021referred to insurance
01/05/2022referred to insurance
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A01039 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A1039
 
SPONSOR: Cahill
  TITLE OF BILL: An act to amend the insurance law, in relation to rating of individual and small group health insurance contracts and policies   PURPOSE: To amend the insurance law to preserve the current stop loss insurance market.   SUMMARY OF PROVISIONS: Section 1 of the bill provides an exception to the definition of small group coverage when coverage is written by a commercial insurer. Section 2 of the bill provides that the prohibition against a commercial insurer acting as a third party administrator or providing stop loss coverage to self-funded small groups would continue to apply only to small groups of fifty or fewer employees or members. Section 3 of the bill provides that the prohibition against a commercial insurer acting as a third party administrator or providing stop loss coverage to self-funded small groups would continue to apply only to small groups of fifty or fewer employees or members. Section 4 of the bill provides an exception to the definition of small group coverage when coverage is written by a corporation organized under Article 43 of the Insurance Law. Section 5 of the bill provides that the prohibition against an Article 43 corporation acting as a third party administrator or providing stop loss coverage to self-funded small groups would continue to apply only to small groups of fifty or fewer employees or members. Section 6 of the bill provides that the prohibition against an Article 43 corporation acting as a third party administrator or providing stop loss coverage to self-funded small groups would continue to apply only to small groups of fifty or fewer employees or members. Section 7 establishes the effective date.   JUSTIFICATION: Since 1993, insurance companies have been permitted to write stop loss insurance and to provide administrative services to self-funded employer groups with 51 or more employees. A redefinition of what constitutes a small group, designed to comply with the federal Affordable Care Act, had the inadvertent effect of prohibiting insurers from continuing to issue stop loss coverage to groups with between 51 and 100 employees effective 2016. This bill will allow the current stop loss marketplace to operate uninterrupted for self-insured groups without directly impacting the insured small group market.   LEGISLATIVE HISTORY: 2019-2020: A.172 - Referred to Insurance 2017-2018: A.99 Amend and recommit to Insurance 2015-2016: A.1154 - Referred to Insurance 2013-2014: A.9980 Referred to Insurance   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: This act shall take effect immediately.
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A01039 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          1039
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                     January 7, 2021
                                       ___________
 
        Introduced  by  M.  of A. CAHILL, STIRPE, HEVESI, MAGNARELLI, ZEBROWSKI,
          STECK, QUART, FRIEND -- Multi-Sponsored by -- M. of A. FITZPATRICK  --
          read once and referred to the Committee on Insurance
 
        AN  ACT  to amend the insurance law, in relation to rating of individual
          and small group health insurance contracts and policies

          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, except as set forth in subsection (h) of this section, or between
     7  one and one hundred employees or  members  of  the  group  for  policies
     8  issued or renewed on or after January first, two thousand sixteen exclu-
     9  sive  of  spouses  and  dependents,  hereinafter  referred to as a small
    10  group, providing hospital and/or medical  benefits,  including  medicare
    11  supplemental insurance, shall be issued in this state unless such policy
    12  is community rated and, notwithstanding any other provisions of law, the
    13  underwriting  of  such  policy involves no more than the imposition of a
    14  pre-existing condition limitation if otherwise permitted by  this  arti-
    15  cle.
    16    §  2.  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
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01340-01-1

        A. 1039                             2
 
     1  they  purchased  insurance,  would be subject to this section. Provided,
     2  however, the provisions of this paragraph shall not apply  to:  (A)  the
     3  renewal of stop loss, catastrophic or reinsurance coverage issued and in
     4  effect  on  January first, two thousand fifteen to small groups covering
     5  between fifty-one and one hundred employees or members of the group; and
     6  (B) the issuance between January first, two thousand sixteen and  Decem-
     7  ber  thirty-first,  two  thousand sixteen, of stop loss, catastrophic or
     8  reinsurance coverage, and any renewal thereof, to a small group covering
     9  between fifty-one and one hundred employees or  members  of  the  group,
    10  provided  that  such  group  had  stop loss, catastrophic or reinsurance
    11  coverage issued and in effect on January first,  two  thousand  fifteen.
    12  For  purposes  of  this  subsection,  "small  group"  shall mean a group
    13  comprised of between one and fifty employees or  members,  exclusive  of
    14  spouses and dependents.
    15    §  3.  Paragraph  1 of subsection (h) of section 3231 of the insurance
    16  law, as added by chapter 501 of the laws of 1992, is amended to read  as
    17  follows:
    18    (1)  Notwithstanding  any other provision of this chapter, no insurer,
    19  subsidiary of an insurer, or controlled  person  of  a  holding  company
    20  system may act as an administrator or claims paying agent, as opposed to
    21  an  insurer,  on  behalf of small groups which, if they purchased insur-
    22  ance, would be subject to this section. No  insurer,  subsidiary  of  an
    23  insurer,  or  controlled  person  of  a holding company may provide stop
    24  loss, catastrophic or reinsurance coverage to  small  groups  which,  if
    25  they purchased insurance, would be subject to this section. For purposes
    26  of  this  subsection,  "small  group"  shall  mean  a group comprised of
    27  between one and fifty employees or members,  exclusive  of  spouses  and
    28  dependents.
    29    §  4.  Paragraph  1 of subsection (a) of section 4317 of the insurance
    30  law, as amended by section 72 of part D of chapter 56  of  the  laws  of
    31  2013, is amended to read as follows:
    32    (1) No individual health insurance contract and no group health insur-
    33  ance contract covering between one and fifty employees or members of the
    34  group, except as set forth in subsection (e) of this section, or between
    35  one  and  one  hundred  employees  or  members of the group for policies
    36  issued or renewed on or after January first, two thousand sixteen exclu-
    37  sive of spouses and dependents, including contracts for which the premi-
    38  ums are paid by a remitting agent for a group, hereinafter  referred  to
    39  as  a small group, providing hospital and/or medical benefits, including
    40  Medicare supplemental insurance, shall be issued in  this  state  unless
    41  such   contract  is  community  rated  and,  notwithstanding  any  other
    42  provisions of law, the underwriting of such contract  involves  no  more
    43  than  the imposition of a pre-existing condition limitation if otherwise
    44  permitted by this article.
    45    § 5. Paragraph 1 of subsection (e) of section 4317  of  the  insurance
    46  law, as amended by chapter 12 of the laws of 2016, is amended to read as
    47  follows:
    48    (1)  Notwithstanding  any other provision of this chapter, no insurer,
    49  subsidiary of an insurer, or controlled  person  of  a  holding  company
    50  system may act as an administrator or claims paying agent, as opposed to
    51  an  insurer,  on  behalf of small groups which, if they purchased insur-
    52  ance, would be subject to this section.  No  insurer  may  provide  stop
    53  loss,  catastrophic  or  reinsurance  coverage to small groups which, if
    54  they purchased insurance, would be subject to  this  section.  Provided,
    55  however,  the  provisions  of this paragraph shall not apply to: (A) the
    56  renewal of stop loss, catastrophic or reinsurance coverage issued and in

        A. 1039                             3

     1  effect on January first, two thousand fifteen to small  groups  covering
     2  between fifty-one and one hundred employees or members of the group; and
     3  (B) the issuance between January first, two thousand sixteen, and Decem-
     4  ber  thirty-first,  two  thousand sixteen, of stop loss, catastrophic or
     5  reinsurance coverage, and any renewal thereof, to a small group covering
     6  between fifty-one and one hundred employees or  members  of  the  group,
     7  provided  that  such  group  had  stop loss, catastrophic or reinsurance
     8  coverage issued and in effect on January first,  two  thousand  fifteen.
     9  For  purposes  of  this  subsection,  "small  group"  shall mean a group
    10  comprised of between one and fifty employees or  members,  exclusive  of
    11  spouses and dependents.
    12    §  6.  Paragraph  1 of subsection (e) of section 4317 of the insurance
    13  law, as amended by section 72 of part D of chapter 56  of  the  laws  of
    14  2013, is amended to read as follows:
    15    (1)  Notwithstanding  any other provision of this chapter, no insurer,
    16  subsidiary of an insurer, or controlled  person  of  a  holding  company
    17  system may act as an administrator or claims paying agent, as opposed to
    18  an  insurer,  on  behalf of small groups which, if they purchased insur-
    19  ance, would be subject to this section. No  insurer,  subsidiary  of  an
    20  insurer,  or  controlled  person  of  a holding company may provide stop
    21  loss, catastrophic or reinsurance coverage to  small  groups  which,  if
    22  they  purchased  insurance,  would  be  subject  to  this section.   For
    23  purposes of this subsection, "small group" shall mean a group  comprised
    24  of  between one and fifty employees or members, exclusive of spouses and
    25  dependents.
    26    § 7. This act shall take effect  immediately;  provided,  however  the
    27  amendments  to  paragraph  1  of  subsection  (h) of section 3231 of the
    28  insurance law made by section two of this act shall be  subject  to  the
    29  expiration  and  reversion  of  such  paragraph pursuant to section 5 of
    30  chapter 588 of the laws of 2015, as amended, when  upon  such  date  the
    31  provisions of section three of this act shall take effect; and provided,
    32  further, the amendments to paragraph 1 of subsection (e) of section 4317
    33  of  the  insurance law made by section five of this act shall be subject
    34  to the expiration and reversion of such paragraph pursuant to section  5
    35  of  chapter 588 of the laws of 2015, as amended, when upon such date the
    36  provisions of section six of this act shall take effect.
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