S T A T E   O F   N E W   Y O R K
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                                  7949

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                             April 28, 2009
                               ___________

Introduced  by M. of A. SILVER, MORELLE, GOTTFRIED, JOHN, MILLMAN, BREN-
  NAN, FARRELL, POWELL, LENTOL, GLICK, PHEFFER, WEINSTEIN -- Multi-Spon-
  sored by -- M. of  A.  ABBATE,  AUBRY,  BROOK-KRASNY,  CAHILL,  CLARK,
  COLTON,  COOK,  CYMBROWITZ,  DINOWITZ,  GABRYSZAK,  GIANARIS, GUNTHER,
  JACOBS,  JAFFEE,  KOON,  LANCMAN,  LATIMER,  LUPARDO,   MAGEE,   MENG,
  O'DONNELL,  PRETLOW,  J. RIVERA,  P. RIVERA,  ROSENTHAL,  SCARBOROUGH,
  SKARTADOS, WEPRIN, WRIGHT, ZEBROWSKI -- read once and referred to  the
  Committee on Insurance

AN  ACT  to  amend  the insurance law, in relation to a health insurance
  demonstration program for independent workers and  providing  for  the
  repeal of such provisions upon expiration thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The insurance law is amended by adding a new  section  1123
to read as follows:
  S  1123.  HEALTH INSURANCE DEMONSTRATION PROGRAM FOR INDEPENDENT WORK-
ERS.  (A) PURPOSE OF THE DEMONSTRATION PROGRAM. THE  LEGISLATURE  RECOG-
NIZES THAT INDEPENDENT CONTRACTORS, PART-TIME WORKERS, TEMPORARY WORKERS
AND  OTHER INDIVIDUALS WHO PERFORM WORK OUTSIDE THE SCOPE OF A FULL-TIME
EMPLOYMENT RELATIONSHIP WITH  AN  EMPLOYER  FREQUENTLY  LACK  ACCESS  TO
EMPLOYMENT-BASED  GROUP  HEALTH  INSURANCE  COVERAGE. AS A RESULT, THESE
INDEPENDENT WORKERS, WHO COMPRISE A GROWING PORTION  OF  THE  WORKFORCE,
ARE  MORE  LIKELY THAN TRADITIONAL EMPLOYEES TO BE UNINSURED. THE DEMON-
STRATION PROGRAM AUTHORIZED BY THIS SECTION  IS  INTENDED  TO  TEST  NEW
MODELS  FOR  ENABLING  INDEPENDENT  WORKERS  TO  CREATE THEIR OWN HEALTH
INSURANCE PROGRAMS THAT MEET THEIR SPECIAL NEEDS, WHILE ENSURING COMPLI-
ANCE WITH SOLVENCY REQUIREMENTS, BENEFIT MANDATES AND OTHER  OBLIGATIONS
IMPOSED ON INSURERS UNDER THIS CHAPTER AND ANY REGULATIONS ISSUED BY THE
SUPERINTENDENT.  THE  DEMONSTRATION  PROGRAM WILL ENABLE THE LEGISLATURE
AND THE SUPERINTENDENT TO EVALUATE WHETHER THESE NEW MODELS FOR DELIVER-
ING HEALTH INSURANCE BENEFITS  TO INDEPENDENT WORKERS ARE EFFECTIVE  AND

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11453-01-9
              

A. 7949                             2

SHOULD  BE EXPANDED TO OTHER SEGMENTS OF THE POPULATION THAT LACK ACCESS
TO EMPLOYMENT-BASED HEALTH INSURANCE.
  (B)  DEFINITIONS. FOR THE PURPOSES OF THIS SECTION, UNLESS THE CONTEXT
CLEARLY REQUIRES OTHERWISE:
  (1) "ELIGIBLE ASSOCIATION" MEANS AN ENTITY THAT: (A)  IS  EXEMPT  FROM
FEDERAL  TAXATION  UNDER  SECTION  501(C)(3)  OR  (C)(4) OF THE INTERNAL
REVENUE CODE, (B) WAS INCORPORATED ON OR BEFORE JANUARY FIRST, TWO THOU-
SAND NINE, (C) MEETS THE CRITERIA OF SUBPARAGRAPH (K) OF  PARAGRAPH  ONE
OF  SUBSECTION  (C)  OF SECTION FOUR THOUSAND TWO HUNDRED THIRTY-FIVE OF
THIS CHAPTER, AND (D) HAS BEEN ISSUED ONE OR MORE GROUP HEALTH INSURANCE
POLICIES BY AN ELIGIBLE INSURER THAT COLLECTIVELY  COVER  AT  LEAST  TEN
THOUSAND  INDEPENDENT  WORKERS  FROM DIVERSE AND UNRELATED INDUSTRIES OR
OCCUPATIONS RESIDING AND/OR WORKING IN NEW YORK STATE, INCLUDING SPOUSES
AND DEPENDENTS.
  (2) "ELIGIBLE INSURER" MEANS AN INSURER LICENSED UNDER ARTICLE  FORTY-
TWO OF THIS CHAPTER THAT IS PRIMARILY OWNED OR CONTROLLED BY AN ELIGIBLE
ASSOCIATION.  FOR  PURPOSES OF THIS PARAGRAPH, AN INSURER WILL BE DEEMED
TO BE PRIMARILY OWNED OR CONTROLLED BY AN ELIGIBLE  ASSOCIATION  IF  THE
ELIGIBLE ASSOCIATION OR A WHOLLY OWNED SUBSIDIARY THEREOF OWNS MORE THAN
FIFTY  PERCENT  OF  THE STOCK OF THE INSURER OR HAS THE RIGHT TO APPOINT
MORE THAN FIFTY PERCENT OF THE MEMBERS OF THE INSURER'S GOVERNING BODY.
  (3) "INDEPENDENT WORKER" MEANS AN  INDIVIDUAL  WHO,  AT  THE  TIME  OF
APPLICATION FOR HEALTH INSURANCE: (A) WORKS AS A FREELANCER, INDEPENDENT
CONTRACTOR OR CONSULTANT, (B) IS SELF-EMPLOYED, (C) WORKS PART-TIME, (D)
WORKS  FOR  A TEMPORARY EMPLOYMENT OR PLACEMENT AGENCY, OR (E) WORKS FOR
MORE THAN ONE EMPLOYER SIMULTANEOUSLY. AN INDIVIDUAL IS NOT AN INDEPEND-
ENT WORKER IF HE OR SHE WORKS FULL-TIME  AS  AN  EMPLOYEE  OF  A  SINGLE
EMPLOYER OTHER THAN A TEMPORARY OR PLACEMENT AGENCY.
  (4)  "GROUP  HEALTH  INSURANCE"  MEANS  HOSPITAL,  SURGICAL OR MEDICAL
EXPENSE COVERAGE OR OTHER SIMILAR COMPREHENSIVE HEALTH INSURANCE  COVER-
AGE.
  (C) DEMONSTRATION PROGRAM FOR INDEPENDENT WORKERS. (1) THE SUPERINTEN-
DENT  IS  AUTHORIZED  TO  APPROVE A DEMONSTRATION PROGRAM UNDER WHICH AN
ELIGIBLE INSURER ISSUES GROUP HEALTH INSURANCE POLICIES TO  AN  ELIGIBLE
ASSOCIATION.  BOTH  THE  ELIGIBLE INSURER AND THE GROUP HEALTH INSURANCE
POLICIES ISSUED TO THE  ELIGIBLE  ASSOCIATION  UNDER  THE  DEMONSTRATION
PROGRAM SHALL BE SUBJECT TO THE PROVISIONS OF THIS CHAPTER AND ANY REGU-
LATIONS  ISSUED  BY THE SUPERINTENDENT, EXCEPT THAT, NOTWITHSTANDING ANY
OTHER PROVISION OF THIS CHAPTER OR ANY REGULATIONS ISSUED BY THE  SUPER-
INTENDENT,  THE  ELIGIBLE  INSURER  SHALL NOT BE REQUIRED TO OFFER GROUP
HEALTH INSURANCE POLICIES TO ANY GROUP OTHER THAN THE  ELIGIBLE  ASSOCI-
ATION THAT OWNS OR CONTROLS FIFTY PERCENT OR MORE OF THE ELIGIBLE INSUR-
ER.
  (2)  SUBJECT TO PARAGRAPH THREE OF THIS SUBSECTION, THE SUPERINTENDENT
MAY ISSUE AN APPROVAL TO AN ELIGIBLE INSURER UNDER PARAGRAPH ONE OF THIS
SUBSECTION IF THE ELIGIBLE INSURER DEMONSTRATES THAT  IT  SATISFIES  ALL
FINANCIAL,  OPERATIONAL  AND  OTHER REQUIREMENTS OF THIS CHAPTER AND THE
DEPARTMENT'S REGULATIONS APPLICABLE TO THE ELIGIBLE INSURER, OTHER  THAN
ANY  REQUIREMENTS EXPRESSLY WAIVED BY THIS SECTION, AND WILL OPERATE THE
DEMONSTRATION PROGRAM  IN  ACCORDANCE  WITH  THE  REQUIREMENTS  OF  THIS
SECTION.
  (3)  ANY  ELIGIBLE INSURER SEEKING THE SUPERINTENDENT'S APPROVAL UNDER
PARAGRAPH ONE OF THIS SUBSECTION SHALL SUBMIT A WRITTEN REQUEST  TO  THE
SUPERINTENDENT WITHIN THIRTY DAYS OF THE EFFECTIVE DATE OF THIS SECTION.
THE ELIGIBLE INSURER'S APPLICATION SHALL SPECIFY THE IDENTITY AND COMPO-
SITION  OF  THE ELIGIBLE ASSOCIATION, THE ELIGIBLE ASSOCIATION'S MEMBER-

A. 7949                             3

SHIP RULES, AND THE TERMS UNDER WHICH THE ELIGIBLE  INSURER  INTENDS  ON
PROVIDING  GROUP  HEALTH  INSURANCE  TO  THE ELIGIBLE ASSOCIATION. IN NO
EVENT SHALL THE SUPERINTENDENT ISSUE AN APPROVAL TO MORE THAN ONE ELIGI-
BLE  INSURER.  IF  MORE THAN ONE ELIGIBLE INSURER SUBMITS AN APPLICATION
WITHIN THE TIME PERIOD SPECIFIED IN THIS PARAGRAPH,  THE  SUPERINTENDENT
SHALL PROCESS SUCH APPLICATIONS IN THE ORDER IN WHICH THEY ARE RECEIVED.
  (4)  THE  SUPERINTENDENT MAY REVOKE AN APPROVAL ISSUED UNDER PARAGRAPH
ONE OF THIS SUBSECTION IF THE INSURER THAT  RECEIVED  SUCH  APPROVAL  NO
LONGER  QUALIFIES  AS AN ELIGIBLE INSURER OR IS OTHERWISE OPERATING IN A
MANNER INCONSISTENT WITH THE PROVISIONS OF  THIS  SECTION.  AN  ELIGIBLE
INSURER  APPROVED  UNDER  PARAGRAPH  ONE OF THIS SUBSECTION SHALL SUBMIT
PERIODIC REPORTS TO THE SUPERINTENDENT SUFFICIENT TO ENABLE  THE  SUPER-
INTENDENT  TO  EVALUATE  THE EFFECTIVENESS OF THE DEMONSTRATION PROGRAM.
SUCH REPORTS SHALL INCLUDE A COMPARISON OF THE COST OF HEALTH  INSURANCE
OBTAINED  UNDER  THE  PROGRAM  TO  OTHER AVAILABLE INSURANCE OPTIONS, AN
ANALYSIS OF THE PERCENTAGE OF INDIVIDUALS COVERED  BY  THE  PROGRAM  WHO
WERE  UNINSURED OR RECEIVING HEALTH BENEFITS UNDER THE 1985 CONSOLIDATED
OMNIBUS BUDGET RECONCILIATION ACT (COBRA) AT THE TIME OF  ENROLLMENT,  A
DEMOGRAPHIC AND GEOGRAPHIC ANALYSIS OF THE ENROLLED POPULATION AND OTHER
INFORMATION DEEMED APPROPRIATE BY THE SUPERINTENDENT.
  (5)  NOTHING  IN  THIS  SECTION SHALL PROHIBIT AN ELIGIBLE ASSOCIATION
FROM ESTABLISHING ELIGIBILITY RULES GOVERNING MEMBERSHIP IN THE  ASSOCI-
ATION AND/OR ACCESS TO GROUP HEALTH INSURANCE THROUGH THE ELIGIBLE ASSO-
CIATION,  INCLUDING BUT NOT LIMITED TO, RULES GOVERNING MINIMUM EARNINGS
OR HOURS WORKED, RETROSPECTIVE TIME PERIODS FOR  MEASURING  EARNINGS  OR
HOURS, RENEWAL OF ELIGIBILITY AND TYPES OF COVERED INDUSTRIES OR OCCUPA-
TIONS;  PROVIDED,  HOWEVER,  THAT NO SUCH RULES MAY BE INCONSISTENT WITH
THE PROVISIONS OF THIS SECTION. AN ELIGIBLE ASSOCIATION SHALL NOTIFY THE
SUPERINTENDENT OF ANY PROPOSED CHANGES TO SUCH  RULES  AT  LEAST  THIRTY
DAYS  IN  ADVANCE OF THEIR EFFECTIVE DATE. AN ELIGIBLE ASSOCIATION SHALL
NOT IMPLEMENT ANY SUCH CHANGES IF THE SUPERINTENDENT NOTIFIES THE ELIGI-
BLE ASSOCIATION DURING SUCH  THIRTY-DAY  PERIOD  THAT  THE  CHANGES  ARE
INCONSISTENT WITH THE PROVISIONS OF THIS SECTION.
  S  2.  This  act shall take effect immediately and shall expire and be
deemed repealed December 31, 2014.