S T A T E O F N E W Y O R K
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4602
2009-2010 Regular Sessions
I N S E N A T E
April 24, 2009
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Introduced by Sens. BRESLIN, DUANE -- read twice and ordered printed,
and when printed to be committed 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
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
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11453-01-9
S. 4602 2
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-
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.
S. 4602 3
(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.
