S T A T E   O F   N E W   Y O R K
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                                  1768

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 12, 2009
                               ___________

Introduced  by M. of A. MORELLE, DESTITO, MAGEE, SCHIMMINGER, SCHROEDER,
  GUNTHER -- Multi-Sponsored by -- M. of  A.  CAHILL,  DIAZ,  ESPAILLAT,
  GALEF,  HOOPER, HOYT, V. LOPEZ, MARKEY, McENENY, MILLMAN, ORTIZ, PHEF-
  FER, P. RIVERA, WALKER, WEISENBERG -- read once and  referred  to  the
  Committee on Insurance

AN  ACT  to  amend the insurance law, in relation to standardized health
  insurance contracts for qualifying small employers and individuals

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

  Section  1.  Subsection  (c)  of section 4326 of the insurance law, as
added by chapter 1 of the laws of 1999, subparagraph (A) of paragraph  1
and  subparagraph  (C)  of  paragraph 3 as amended by chapter 419 of the
laws of 2000, is amended to read as follows:
  (c) The following definitions shall be  applicable  to  the  insurance
contracts offered under the program established by this section:
  (1) A qualifying small employer is an employer that is either:
  (A)  An  individual  proprietor  who is the only employee of the busi-
ness[:
  (i) without health insurance which provides  benefits  on  an  expense
reimbursed  or  prepaid  basis  in effect during the twelve month period
prior to application for a qualifying group  health  insurance  contract
under the program established by this section; and
  (ii)]  WHO  resides in a household having a net household income at or
below two hundred eight percent of the non-farm  federal  poverty  level
(as  defined  and  updated by the federal department of health and human
services) or the gross equivalent of such net income;
  [(iii) except that the requirements set forth  in  item  (i)  of  this
subparagraph  shall not be applicable where an individual proprietor had
health insurance coverage during the previous  twelve  months  and  such
coverage  terminated  due  to  one of the reasons set forth in items (i)
through (viii) of subparagraph (C) of paragraph three of subsection  (c)
of this section;] or
  (B) An employer with:
  (i) not more than fifty eligible employees; AND

              

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04177-01-9

A. 1768                             2

  (ii)  [no group health insurance which provides benefits on an expense
reimbursed or prepaid basis covering  employees  in  effect  during  the
twelve  month  period prior to application for a qualifying group health
insurance contract under the program established by this section; and
  (iii)]  at  least  thirty  percent of its eligible employees receiving
annual wages from the employer at a level equal to or less  than  thirty
thousand  dollars.  The  thirty thousand dollar figure shall be adjusted
periodically pursuant to subparagraph [(F)] (D) of this paragraph.
  [(C) The requirements set forth in item (i)  of  subparagraph  (A)  of
this  paragraph  and  in item (ii) of subparagraph (B) of this paragraph
shall not be applicable where an individual proprietor  or  employer  is
transferring from a health insurance contract issued pursuant to the New
York  state  small  business health insurance partnership program estab-
lished by section nine hundred twenty-two of the public  health  law  or
from  health  care  coverage issued pursuant to a regional pilot project
for the uninsured established by section one thousand one hundred  eigh-
teen of this chapter.
  (D)  The twelve month period set forth in item (i) of subparagraph (A)
of this paragraph and in item (ii) of subparagraph (B) of this paragraph
may be adjusted by the superintendent from  twelve  months  to  eighteen
months  if he determines that the twelve month period is insufficient to
prevent inappropriate substitution of other health  insurance  contracts
for qualifying group health insurance contracts.
  (E)]  (C)  An  individual  proprietor  or employer shall cease to be a
qualifying small employer if any health insurance which  provides  bene-
fits  on  an expense reimbursed or prepaid basis covering the individual
proprietor or an  employer's  employees,  other  than  qualifying  group
health  insurance  purchased  pursuant  to this section, is purchased or
otherwise takes effect subsequent to purchase of qualifying group health
insurance under the program established by this section.
  [(F)] (D) The wage levels utilized in subparagraph (B) of  this  para-
graph  shall  be  adjusted  annually, beginning in two thousand two. The
adjustment shall take effect on July first of each year. For July first,
two thousand two, the adjustment shall be a  percentage  of  the  annual
wage  figure specified in subparagraph (B) of this paragraph. For subse-
quent years, the adjustment shall be a percentage  of  the  annual  wage
figure which took effect on July first of the prior year. The percentage
adjustment  shall  be  the  same  percentage by which the current year's
non-farm federal poverty level, as defined and updated  by  the  federal
department  of  health  and  human  services,  for a family unit of four
persons for the forty-eight  contiguous  states  and  Washington,  D.C.,
changed from the same level established for the prior year.
  (2)  A  qualifying group health insurance contract is a group contract
purchased from a health maintenance organization, corporation or insurer
by a qualifying small employer which provides the benefits set forth  in
subsection  (d)  of this section. The contract must insure not less than
fifty percent of the employees eligible for coverage.
  (3)[(A)] A qualifying individual is an employed person[:
  (i) who does not have and has not had health insurance  with  benefits
on an expense reimbursed or prepaid basis during the twelve month period
prior  to  the  individual's  application for health insurance under the
program established by this section;
  (ii) whose employer does not provide group health  insurance  and  has
not  provided  group  health insurance with benefits on an expense reim-
bursed or prepaid basis covering employees in effect during  the  twelve

A. 1768                             3

month  period prior to the individual's application for health insurance
under the program established by this section;
  (iii)]  WHO resides in a household having a net household income at or
below two hundred eight percent of the non-farm  federal  poverty  level
(as  defined  and  updated by the federal department of health and human
services) or the gross equivalent of such net income; and
  [(iv)] WHO is ineligible for Medicare.
  [(B) The requirements set forth in items (i) and (ii) of  subparagraph
(A)  of  this  paragraph  shall not be applicable where an individual is
transferring from a health insurance contract  issued  pursuant  to  the
voucher  insurance  program  established  by  section  one  thousand one
hundred twenty-one of this chapter, a health insurance  contract  issued
pursuant  to the New York state small business health insurance partner-
ship program established by  section  nine  hundred  twenty-two  of  the
public  health law or health care coverage issued pursuant to a regional
pilot project for the uninsured established by section one thousand  one
hundred eighteen of this chapter.
  (C)  The  requirements set forth in items (i) and (ii) of subparagraph
(A) of this paragraph shall not be applicable where  an  individual  had
health  insurance  coverage  during  the previous twelve months and such
coverage terminated due to:
  (i) loss of employment due to factors other than voluntary separation;
  (ii) death of a family member which results in termination of coverage
under a health insurance contract under which the individual is covered;
  (iii) change to a new employer that  does  not  provide  group  health
insurance with benefits on an expense reimbursed or prepaid basis;
  (iv)  change  of  residence so that no employer-based health insurance
with benefits on an expense reimbursed or prepaid basis is available;
  (v) discontinuation of a group health insurance contract with benefits
on an expense reimbursed or prepaid basis covering the qualifying  indi-
vidual as an employee or dependent;
  (vi)  expiration  of the coverage periods established by the continua-
tion provisions of the  Employee  Retirement  Income  Security  Act,  29
U.S.C.    section  1161  et  seq.  and the Public Health Service Act, 42
U.S.C.  section 300bb-1 et seq. established by the Consolidated  Omnibus
Budget  Reconciliation  Act  of  1985,  as  amended, or the continuation
provisions of subsection (m) of section three thousand two hundred twen-
ty-one, subsection (k) of section four thousand three hundred  four  and
subsection (e) of section four thousand three hundred five of this chap-
ter;
  (vii)  legal  separation, divorce or annulment which results in termi-
nation of coverage under a health insurance  contract  under  which  the
individual is covered; or
  (viii) loss of eligibility under a group health plan.
  (D) The twelve month period set forth in items (i) and (ii) of subpar-
agraph  (A) of this paragraph may be adjusted by the superintendent from
twelve months to eighteen months if he determines that the twelve  month
period  is  insufficient  to prevent inappropriate substitution of other
health insurance contracts for qualifying  individual  health  insurance
contracts.]
  (4) A qualifying individual health insurance contract is an individual
contract  issued  directly to a qualifying individual and which provides
the benefits set forth in subsection (d) of this section. At the  option
of  the  qualifying  individual,  such contract may include coverage for
dependents of the qualifying individual.
  S 2. This act shall take effect January 1, 2010.