S T A T E O F N E W Y O R K
________________________________________________________________________
6519--B
2013-2014 Regular Sessions
I N A S S E M B L Y
April 4, 2013
___________
Introduced by M. of A. SILVER, CAHILL, HEASTIE, MORELLE, FARRELL, BREN-
NAN, MILLMAN, LENTOL, GLICK, GOTTFRIED, KAVANAGH, O'DONNELL, PRETLOW,
ROSENTHAL, SCHIMEL, JAFFEE, HEVESI, TITONE, WEINSTEIN, JACOBS, MARKEY,
WEPRIN -- Multi-Sponsored by -- M. of A. ABBATE, AUBRY, BARRETT,
BROOK-KRASNY, CLARK, COLTON, CYMBROWITZ, DINOWITZ, ENGLEBRIGHT,
GABRYSZAK, GALEF, GIBSON, LAVINE, LUPARDO, MAGEE, PEOPLES-STOKES,
PERRY, RIVERA, ROBERTS, SCARBOROUGH, SEPULVEDA, SIMOTAS, SKARTADOS,
STECK, SWEENEY, ZEBROWSKI -- read once and referred to the Committee
on Insurance -- reported and referred to the Committee on Codes --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee -- reported and referred to the Commit-
tee on Rules -- Rules Committee discharged, bill amended, ordered
reprinted as amended and recommitted to the Committee on Rules
AN ACT to amend the insurance law, in relation to creating the freelanc-
ers health plan demonstration program; 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 1125
to read as follows:
S 1125. FREELANCERS HEALTH PLAN DEMONSTRATION PROGRAM. (A) FOR
PURPOSES OF THIS SECTION:
(1) "FREELANCERS ASSOCIATION" MEANS AN ENTITY THAT: (A) IS EXEMPT FROM
FEDERAL TAXATION UNDER SECTION 501(C)(3) OR (C)(4) OF THE INTERNAL
REVENUE CODE; AND (B) PRIOR TO JANUARY FIRST, TWO THOUSAND THIRTEEN, HAS
BEEN ISSUED ONE OR MORE HEALTH INSURANCE POLICIES BY AN INSURER UNDER
SECTION ONE THOUSAND ONE HUNDRED TWENTY-THREE OF THIS ARTICLE.
(2) "FREELANCERS HEALTH PLAN" OR "PLAN" MEANS A PLAN MAINTAINED BY A
FREELANCERS ASSOCIATION FOR THE PURPOSE OF PROVIDING MEDICAL, SURGICAL,
OR HOSPITAL SERVICES TO INDEPENDENT WORKERS WHO ARE MEMBERS OF THE FREE-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10111-10-3
A. 6519--B 2
LANCERS ASSOCIATION AND A MEMBER'S SPOUSE, CHILDREN AND OTHER PERSONS
CHIEFLY DEPENDENT UPON THE MEMBER FOR SUPPORT AND MAINTENANCE.
(3) "INDEPENDENT WORKER" MEANS AN INDIVIDUAL WHO: (A) IS AN INDEPEND-
ENT CONTRACTOR; (B) IS SELF-EMPLOYED; (C) WORKS PART-TIME; (D) OBTAINS
TEMPORARY WORK THROUGH AN EMPLOYMENT AGENCY; (E) PERFORMS TEMPORARY WORK
FOR TWO OR MORE EMPLOYERS SIMULTANEOUSLY; (F) IS A DOMESTIC CHILD CARE
WORKER; OR (G) IS HIRED TO WORK FULL-TIME FOR A SINGLE EMPLOYER FOR A
PERIOD NOT TO EXCEED EIGHTEEN MONTHS IF SUCH EMPLOYER DOES NOT OFFER
GROUP HEALTH INSURANCE TO EMPLOYEES EMPLOYED ON A TEMPORARY BASIS. AN
INDIVIDUAL IS NOT AN INDEPENDENT WORKER IF HE OR SHE IS EMPLOYED
FULL-TIME BY A SINGLE EMPLOYER, WITH THE EXCEPTION OF AN INDIVIDUAL WHO
MEETS THE REQUIREMENTS OF SUBPARAGRAPH (D), (F) OR (G) OF THIS PARA-
GRAPH.
(4) "MEMBER CONTRACT" MEANS EVIDENCE OF COVERAGE FURNISHED TO AN INDE-
PENDENT WORKER WHO IS A MEMBER OF A FREELANCERS ASSOCIATION THAT SETS
FORTH ALL BENEFITS AND TERMS AND CONDITIONS WITH REGARD TO A FREELANCERS
HEALTH PLAN.
(5) "QUALIFIED ACTUARY" MEANS AN ACTUARY WHO IS A MEMBER IN GOOD
STANDING OF THE AMERICAN ACADEMY OF ACTUARIES OR SOCIETY OF ACTUARIES,
WITH EXPERIENCE IN ESTABLISHING RATES FOR SELF-INSURED TRUSTS PROVIDING
HEALTH BENEFITS OR OTHER SIMILAR EXPERIENCE.
(B) A FREELANCERS ASSOCIATION SHALL NOT ESTABLISH, MAINTAIN, OR OTHER-
WISE PARTICIPATE IN A FREELANCERS HEALTH PLAN UNLESS THE FREELANCERS
ASSOCIATION OBTAINS AND MAINTAINS A DEMONSTRATION PROGRAM WAIVER FROM
THE SUPERINTENDENT PURSUANT TO THE PROVISIONS OF THIS SECTION.
(C) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, A FREELANCERS ASSO-
CIATION OPERATING A FREELANCERS HEALTH PLAN SHALL:
(1) WITH THE EXCEPTION OF THE ENROLLMENT PROVISIONS AS PROVIDED FOR IN
SECTION FOUR THOUSAND THREE HUNDRED SEVENTEEN OF THIS CHAPTER AND
STABILIZATION OF HEALTH INSURANCE MARKETS AND PREMIUM RATES AS PROVIDED
FOR IN SECTION THREE THOUSAND TWO HUNDRED THIRTY-THREE OF THIS CHAPTER,
BE SUBJECT TO THE SAME PROVISIONS AND REQUIREMENTS OF A CORPORATION
ORGANIZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; AND
(2) PROVIDE THAT ITS PLAN WILL HAVE AN EXPECTED LOSS RATIO OF NOT LESS
THAN EIGHTY-TWO PERCENT. IN REVIEWING A RATE FILING OR APPLICATION BY A
PLAN, THE SUPERINTENDENT MAY MODIFY THE EIGHTY-TWO PERCENT EXPECTED
MINIMUM LOSS RATIO REQUIREMENT IF THE SUPERINTENDENT DETERMINES THE
MODIFICATION TO BE IN THE INTERESTS OF THE PEOPLE OF THIS STATE OR IF
THE SUPERINTENDENT DETERMINES THAT A MODIFICATION IS NECESSARY TO MAIN-
TAIN PLAN SOLVENCY. NO LATER THAN ONE HUNDRED TWENTY DAYS AFTER THE
CLOSE OF A PLAN'S FISCAL YEAR, A PLAN SHALL ANNUALLY REPORT THE ACTUAL
LOSS RATIO FOR THE PREVIOUS PLAN FISCAL YEAR IN A FORMAT ACCEPTABLE TO
THE SUPERINTENDENT. IF THE EXPECTED LOSS RATIO IS NOT MET, THEN THE
SUPERINTENDENT MAY DIRECT THE PLAN TO TAKE CORRECTIVE ACTION IN ADDITION
TO THE REQUIREMENTS OF SECTION FOUR THOUSAND THREE HUNDRED EIGHT OF THIS
CHAPTER; AND
(3) INCLUDE IN ITS MEMBER CONTRACTS THAT THE MEMBER CONTRACT WILL NOT
BE EFFECTIVE AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN; AND
(4) PAY ALL CLAIMS UNDER ITS MEMBER CONTRACTS BY DECEMBER
THIRTY-FIRST, TWO THOUSAND FIFTEEN.
(D) A FREELANCERS ASSOCIATION SHALL FILE AN APPLICATION FOR A DEMON-
STRATION PROGRAM WAIVER ON SUCH FORM AS THE SUPERINTENDENT MAY
PRESCRIBE, AND SHALL PROVIDE TO THE SATISFACTION OF THE SUPERINTENDENT
THE FOLLOWING:
(1) A COPY OF THE MEMBER CONTRACT, INCLUDING A TABLE OF THE PREMIUM
RATES CHARGED OR PROPOSED TO BE CHARGED, THAT EFFECTIVE JANUARY FIRST,
A. 6519--B 3
TWO THOUSAND FOURTEEN, CONTAINS THE BENEFITS DESCRIBED IN PARAGRAPH ONE
OF SUBSECTION (B) OF SECTION FOUR THOUSAND THREE HUNDRED TWENTY-EIGHT OF
THIS CHAPTER AND SHALL OFFER TO ITS MEMBERS, AT A MINIMUM, A CONTRACT AT
ONE OF THE LEVELS OF COVERAGE, AS DEFINED IN SECTION 1302(D) OF THE
AFFORDABLE CARE ACT, 42 USC 18022(D);
(2) A REPORT INDICATING THE BENEFIT PROVISIONS, PREMIUM RATES, AND
INCURRED MEDICAL LOSSES ASSOCIATED WITH THE FREELANCERS ASSOCIATION'S
MEMBERS UNDER THE INSURANCE POLICIES INSURING THE FREELANCERS ASSOCI-
ATION'S MEMBERS PURSUANT TO SECTION ONE THOUSAND ONE HUNDRED
TWENTY-THREE OF THIS ARTICLE FOR THE THREE YEARS PRIOR TO THE DATE OF
THE APPLICATION;
(3) THE MOST RECENT CERTIFIED INDEPENDENTLY-AUDITED FINANCIAL STATE-
MENT FOR THE FREELANCERS ASSOCIATION;
(4) A REPORT PREPARED BY A QUALIFIED ACTUARY THAT SUPPORTS THE
PROPOSED PREMIUMS FOR THE PLAN;
(5) A COPY OF ALL AGREEMENTS BETWEEN THE FREELANCERS ASSOCIATION AND
ANY PLAN ADMINISTRATOR, WITH REGARD TO THE FREELANCERS HEALTH PLAN;
(6) A PRO-FORMA BALANCE SHEET, INCLUDING ACTUARIALLY DETERMINED CLAIMS
LIABILITIES, AND STATEMENT OF REVENUE AND EXPENSES, INCLUDING REASONABLY
PROJECTED EXPENSES, MEDICAL LOSSES, AND PREMIUMS TO BE CHARGED TO
MEMBERS OF THE PLAN;
(7) A NARRATIVE DESCRIPTION OF:
(A) THE ACCOUNTING METHODOLOGY THAT THE FREELANCERS ASSOCIATION WILL
UTILIZE, WHICH SHALL BE IN ACCORDANCE WITH STATUTORY ACCOUNTING PRAC-
TICES AND PROCEDURES AS PRESCRIBED BY APPLICABLE PROVISIONS OF THIS
CHAPTER AND REGULATIONS PROMULGATED THEREUNDER AS WOULD BE APPLICABLE TO
A CORPORATION ORGANIZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER;
(B) BILLING AND CLAIM PAYMENT PROCEDURES, INCLUDING THE NAMES AND
CONTACT INFORMATION FOR THOSE PERSONS CHARGED WITH HANDLING ACCOUNTING
AND CLAIMS ISSUES; AND
(C) ANY COMPENSATION THE FREELANCERS ASSOCIATION WILL RECEIVE IN
CONNECTION WITH THE PLAN;
(8) A COPY OF ANY STOP-LOSS INSURANCE POLICY ISSUED OR PROPOSED TO BE
ISSUED BY AN INSURER AUTHORIZED TO DO THE BUSINESS OF ACCIDENT AND
HEALTH INSURANCE IN THIS STATE OR IS A HEALTH SERVICE CORPORATION ORGAN-
IZED UNDER ARTICLE FORTY-THREE OF THIS CHAPTER; AND
(9) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
(E) UPON COMPLIANCE WITH THIS SECTION, TO THE EXTENT PERMISSIBLE UNDER
FEDERAL LAW, IF A FREELANCERS ASSOCIATION SUBMITS A MATERIALLY SATISFAC-
TORY AND COMPLETE APPLICATION WITHIN SIXTY DAYS OF THE EFFECTIVE DATE OF
THIS SECTION, THEN THE SUPERINTENDENT MAY ISSUE THE FREELANCERS ASSOCI-
ATION A DEMONSTRATION PROGRAM WAIVER THAT IS EFFECTIVE ON OR BEFORE
JANUARY FIRST, TWO THOUSAND FOURTEEN. EVERY DEMONSTRATION PROGRAM WAIVER
SHALL CONTAIN THE NAME OF THE ENTITY AND ITS HOME OFFICE ADDRESS. THE
SUPERINTENDENT SHALL REFUSE TO GRANT A DEMONSTRATION PROGRAM WAIVER TO
AN APPLICANT THAT FAILS TO MEET THE REQUIREMENTS OF THIS SECTION. THE
SUPERINTENDENT MAY REFUSE TO ISSUE ANY DEMONSTRATION PROGRAM WAIVER IF,
IN THE SUPERINTENDENT'S JUDGMENT, THE REFUSAL WILL BEST PROMOTE THE
INTERESTS OF THE PEOPLE OF THIS STATE. NOTICE OF REFUSAL SHALL BE IN
WRITING AND SHALL SET FORTH THE BASIS FOR REFUSAL. IF THE APPLICANT
SUBMITS A WRITTEN REQUEST WITHIN THIRTY DAYS AFTER RECEIPT OF THE NOTICE
OF REFUSAL, THEN THE SUPERINTENDENT SHALL CONDUCT A HEARING TO GIVE THE
APPLICANT THE OPPORTUNITY TO SHOW CAUSE WHY THE REFUSAL SHOULD NOT BE
MADE FINAL.
(F) IN ORDER TO OBTAIN AND MAINTAIN A DEMONSTRATION PROGRAM WAIVER, A
FREELANCERS ASSOCIATION SHALL:
A. 6519--B 4
(1) FILE A COMPLETE APPLICATION WITH THE SUPERINTENDENT IN ACCORDANCE
WITH SUBSECTION (D) OF THIS SECTION;
(2) HAVE WITHIN ITS OWN ORGANIZATION ADEQUATE RESOURCES AND COMPETENT
PERSONNEL TO ADMINISTER THE FREELANCERS HEALTH PLAN OR, IN ORDER TO
PROVIDE SUCH ADMINISTRATIVE SERVICES, IN WHOLE OR PART, HAVE CONTRACTED
WITH A PERSON OR ENTITY TO SERVE AS A PLAN ADMINISTRATOR, DETERMINED BY
THE FREELANCERS ASSOCIATION TO BE QUALIFIED BASED UPON WRITTEN DOCUMEN-
TATION FURNISHED TO THE FREELANCERS ASSOCIATION, PROVIDED THAT THE
DOCUMENTATION SHALL BE MADE AVAILABLE TO THE SUPERINTENDENT UPON
REQUEST;
(3) ESTABLISH AND MAINTAIN PREMIUM RATES SUFFICIENT TO MEET ITS
CONTRACTUAL OBLIGATIONS AND TO SATISFY THE RESERVE REQUIREMENTS SET
FORTH IN SUBSECTION (H) OF THIS SECTION;
(4) ESTABLISH AND MAINTAIN A FAIR AND EQUITABLE PROCESS FOR CLAIMS
REVIEW, DISPUTE RESOLUTION, AND APPEAL PROCEDURES, INCLUDING ARBITRATION
OF REJECTED CLAIMS, AND PROCEDURES FOR HANDLING CLAIMS FOR BENEFITS IN
THE EVENT OF PLAN DISSOLUTION, THAT ARE SATISFACTORY TO THE SUPERINTEN-
DENT AND ARE SUBJECT TO ARTICLE FORTY-NINE OF THIS CHAPTER;
(5) PROVIDE MEMBERS WITH A MEMBER CONTRACT;
(6) MAINTAIN ITS FUNCTIONS, ACTIVITIES AND SERVICES UNDERTAKEN AND
PERFORMED PURSUANT TO A DEMONSTRATION PROGRAM WAIVER SEPARATE FROM ANY
OTHER FUNCTION, ACTIVITY OR SERVICE THROUGH THE MAINTENANCE OF SEPARATE
RECORDS, REPORTS AND ACCOUNTS FOR EACH SUCH FREELANCERS ASSOCIATION
FUNCTION, ACTIVITY, OR SERVICE. THE RECORDS, REPORTS AND ACCOUNTS OF THE
FREELANCERS ASSOCIATION SHALL BE MAINTAINED SEPARATELY FROM THOSE OF ANY
OTHER PERSON OR FREELANCERS ASSOCIATION THAT IS A PARENT, SUBSIDIARY OR
AFFILIATE OF THE FREELANCERS ASSOCIATION;
(7) FILE ALL PLAN DOCUMENTS AND ANY AMENDMENTS THERETO WITH THE SUPER-
INTENDENT AND RECEIVE THE SUPERINTENDENT'S APPROVAL IN ACCORDANCE WITH
THIS SECTION; AND
(8) PROVIDE PROMINENT, SEPARATELY STATED NOTICE TO ALL PLAN PARTIC-
IPANTS THAT THEIR CONTRACTS WILL NOT BE EFFECTIVE AFTER DECEMBER THIR-
TY-FIRST, TWO THOUSAND FOURTEEN, AND THAT THEIR POLICIES ARE NON-RENEWA-
BLE FOR ANY PERIOD BEYOND DECEMBER THIRTY-FIRST, TWO THOUSAND FOURTEEN.
(G) A FREELANCERS ASSOCIATION THAT HAS RECEIVED A DEMONSTRATION
PROGRAM WAIVER SHALL FILE WITH THE SUPERINTENDENT, FOR THE SUPERINTEN-
DENT'S PRIOR APPROVAL, ANY AMENDMENTS TO THE MEMBER CONTRACT, FREELANC-
ERS HEALTH PLAN, OR PREMIUM RATES CHARGED FOR THE PLAN.
(H)(1) A FREELANCERS ASSOCIATION SHALL ESTABLISH AND MAINTAIN A
RESERVE TO BE DESIGNATED AS THE STATUTORY RESERVE FUND, IN AN AMOUNT
EQUAL TO TWELVE AND ONE-HALF PER CENTUM OF THE NET PREMIUM INCOME OF THE
PLAN, IN ADDITION TO RESERVES CONSISTING OF THE AMOUNTS NECESSARY TO
SATISFY ALL CONTRACTUAL OBLIGATIONS AND LIABILITIES OF THE PLAN, INCLUD-
ING: (A) A RESERVE FOR PAYMENT OF CLAIMS AND EXPENSES THEREON REPORTED
BUT NOT YET PAID, AND CLAIMS AND EXPENSES THEREON INCURRED BUT NOT YET
REPORTED; AND (B) A RESERVE FOR UNEARNED PREMIUM EQUIVALENTS, COMPUTED
PRO-RATA ON THE BASIS OF THE UNEXPIRED PORTION OF THE POLICY PERIOD.
(2) IF AT ANY TIME THE RESERVE FUNDS REQUIRED TO BE ESTABLISHED PURSU-
ANT TO THIS SECTION FALL BELOW THE REQUIRED MINIMUM AMOUNTS, THEN THE
FREELANCERS ASSOCIATION SHALL IMMEDIATELY NOTIFY THE SUPERINTENDENT OF
SUCH IMPAIRMENT. THE FREELANCERS ASSOCIATION SHALL CURE THE IMPAIRMENT
WITHIN FIVE BUSINESS DAYS.
(3) THE ASSETS CONSTITUTING THE FREELANCERS HEALTH PLAN'S STATUTORY
RESERVE FUND SHALL CONSIST SOLELY OF CERTIFICATES OF DEPOSIT ISSUED BY A
UNITED STATES BANK AND PAYABLE IN UNITED STATES LEGAL TENDER, OR SECURI-
TIES REPRESENTING INVESTMENTS OF THE TYPES SPECIFIED IN PARAGRAPHS ONE,
A. 6519--B 5
TWO, THREE, EIGHT, AND TEN OF SUBSECTION (A) OF SECTION ONE THOUSAND
FOUR HUNDRED FOUR OF THIS CHAPTER, OR AS OTHERWISE EXPRESSLY PERMITTED
BY THE SUPERINTENDENT. ANY INTEREST EARNED OR CAPITAL GAIN REALIZED ON
THE MONEY SO DEPOSITED OR INVESTED SHALL ACCRUE TO AND BECOME PART OF
THE PLAN'S STATUTORY RESERVE FUND.
(4) THE PLAN'S ASSETS, LIABILITIES, INCOME AND EXPENSES SHALL BE
ACCOUNTED FOR SEPARATE AND APART FROM ALL OTHER ASSETS, LIABILITIES,
INCOME AND EXPENSES OF THE FREELANCERS ASSOCIATION. THE ACCOUNTING FOR
THE PLAN'S STATUTORY RESERVE FUND SHALL SHOW: (A) THE PURPOSE, SOURCE,
DATE AND AMOUNT OF EACH SUM PAID INTO THE FUND; (B) THE INTEREST EARNED
BY SUCH FUND; (C) CAPITAL GAINS OR LOSSES RESULTING FROM THE SALE OF
INVESTMENTS OF THE PLAN'S STATUTORY RESERVE FUND; (D) THE ORDER,
PURPOSE, DATE AND AMOUNT OF EACH PAYMENT FROM THE STATUTORY RESERVE
FUND; AND (E) THE ASSETS OF THE STATUTORY RESERVE FUND, INDICATING CASH
BALANCE AND SCHEDULE OF INVESTMENTS.
(5) THE REQUIREMENTS FOR FUNDING OF THE PLAN'S RESERVES SHALL BE
CALCULATED USING STATUTORY ACCOUNTING PRACTICES AND PROCEDURES. ONLY
THOSE EXPENSES THAT RELATE TO THE PLAN SHALL BE INCLUDED IN CALCULATING
THE REQUIREMENTS FOR FUNDING OF THE PLAN'S RESERVE FUNDS. EXPENSES ALLO-
CATED TO THE PLAN SHALL BE ALLOCATED ON AN EQUITABLE BASIS IN CONFORMITY
WITH CUSTOMARY INSURANCE ACCOUNTING PRINCIPLES CONSISTENTLY APPLIED. THE
BOOKS, ACCOUNTS, AND RECORDS OF THE PLAN SHALL BE MAINTAINED AS TO
CLEARLY AND ACCURATELY DISCLOSE THE NATURE AND DETAILS OF ALL EXPENSES
SO AS TO SUPPORT THE REASONABLENESS OF SUCH EXPENSES.
(I) (1) A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT
WITHIN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF THE PLAN'S FISCAL YEAR A
REPORT THAT CONTAINS:
(A) AN ANNUAL FINANCIAL STATEMENT, VERIFIED BY THE OATH OF AT LEAST
TWO OF THE FREELANCERS ASSOCIATION'S PRINCIPAL OFFICERS, WITH DIRECT
KNOWLEDGE OF THE OPERATIONS OF THE FREELANCERS HEALTH PLAN, SHOWING THE
FINANCIAL CONDITION AND AFFAIRS OF THE PLAN DURING THE MOST RECENT
FISCAL YEAR, IN ACCORDANCE WITH LAW AND STATUTORY PRACTICES AND PROCE-
DURES AS ADOPTED BY THE SUPERINTENDENT, IN A FORM PRESCRIBED BY THE
SUPERINTENDENT;
(B) THE IDENTITY OF THE QUALIFIED ACTUARY UTILIZED BY THE FREELANCERS
ASSOCIATION OR PLAN AND THE AMOUNT PAID TO THE QUALIFIED ACTUARY BY THE
FREELANCERS ASSOCIATION OR PLAN DURING ITS MOST RECENT FISCAL YEAR;
(C) THE IDENTITIES OF THE PLAN'S TEN LARGEST VENDORS BY PAYMENT AMOUNT
DURING ITS MOST RECENT FISCAL YEAR;
(D) THE NAME AND CONTACT INFORMATION OF THE PERSON OR ENTITY APPOINTED
BY THE FREELANCERS ASSOCIATION TO ADMINISTER THE FREELANCERS HEALTH
PLAN;
(E) A PRO-FORMA STATEMENT OF PROJECTED REVENUE AND EXPENSES FOR HEALTH
BENEFITS ANTICIPATED BY THE PLAN FOR THE NEXT TWELVE-MONTH PERIOD OF THE
PLAN'S OPERATION, PROVIDED ON A FISCAL YEAR;
(F) A DETAILED REPORT OF THE OPERATIONS AND CONDITION OF THE PLAN'S
RESERVE FUNDS; AND
(G) SUCH OTHER INFORMATION AS THE SUPERINTENDENT MAY REQUIRE.
(2) A FREELANCERS ASSOCIATION SHALL FILE WITH THE SUPERINTENDENT WITH-
IN ONE HUNDRED TWENTY DAYS OF THE CLOSE OF ITS FREELANCERS HEALTH PLAN'S
FISCAL YEAR THE MOST RECENT CERTIFIED, INDEPENDENTLY AUDITED FINANCIAL
STATEMENT FOR THE FREELANCERS ASSOCIATION. THE STATEMENT SHALL INCLUDE
AN OPINION OF AN INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT. THE NOTES TO
THE FINANCIAL STATEMENT SHALL SHOW THE FINANCIAL RESULTS OF THE FREE-
LANCERS HEALTH PLAN OPERATIONS AND A DESCRIPTION AS TO HOW THE FREELANC-
ERS ASSOCIATION MEETS THE RESERVE REQUIREMENTS IN PARAGRAPH ONE OF
A. 6519--B 6
SUBSECTION (H) OF THIS SECTION, INCLUDING THE AMOUNTS REPORTED FOR EACH
OF THE RESERVES, THE METHOD USED TO CALCULATE THE RESERVES, AND THE
CHANGE IN THE RESERVES FROM THE BEGINNING OF THE PLAN'S FISCAL YEAR TO
THE END OF THE PLAN'S FISCAL YEAR. IN ADDITION, THE NOTES TO FINANCIAL
STATEMENT SHALL DETAIL THE ASSETS COMPRISING THE STATUTORY RESERVE FUND
TO DEMONSTRATE COMPLIANCE WITH PARAGRAPH ONE OF SUBSECTION (H) OF THIS
SECTION.
(3) A FREELANCERS ASSOCIATION SHALL FILE A REPORT WITH THE SUPERINTEN-
DENT EACH QUARTER, WITHIN FORTY-FIVE DAYS AFTER QUARTER CLOSE, DESCRIB-
ING THE PLAN'S CURRENT FINANCIAL STATUS AND PROVIDING SUCH INFORMATION
AS THE SUPERINTENDENT MAY PRESCRIBE.
(4) A FREELANCERS ASSOCIATION THAT FAILS TO FILE ANY REPORT OR STATE-
MENT REQUIRED BY THIS CHAPTER, OR FAILS TO REPLY WITHIN THIRTY DAYS TO A
WRITTEN INQUIRY BY THE SUPERINTENDENT IN CONNECTION THEREWITH SHALL, IN
ADDITION TO OTHER PENALTIES PROVIDED BY THIS CHAPTER, BE SUBJECT, UPON
NOTICE AN OPPORTUNITY TO BE HEARD, TO A PENALTY OF UP TO ONE THOUSAND
DOLLARS PER DAY OF DELAY, NOT TO EXCEED TWENTY-FIVE THOUSAND DOLLARS IN
THE AGGREGATE, FOR EACH SUCH FAILURE.
(J) THE SUPERINTENDENT MAY, PURSUANT TO SECTIONS THREE HUNDRED NINE,
THREE HUNDRED TEN, THREE HUNDRED ELEVEN, AND THREE HUNDRED TWELVE OF
THIS CHAPTER, AND PURSUANT TO THE FINANCIAL SERVICES LAW, MAKE AN EXAM-
INATION INTO THE AFFAIRS OF ANY FREELANCERS ASSOCIATION WITH REGARD TO A
FREELANCERS HEALTH PLAN ISSUED BY THE FREELANCERS ASSOCIATION, AS OFTEN
AS THE SUPERINTENDENT DEEMS IT EXPEDIENT FOR THE PROTECTION OF THE
INTERESTS OF THE PEOPLE OF THIS STATE. THE EXPENSES OF EVERY EXAMINA-
TION OF THE AFFAIRS OF THE FREELANCERS ASSOCIATION, WITH REGARD TO A
FREELANCERS HEALTH PLAN ESTABLISHED OR MAINTAINED BY THE FREELANCERS
ASSOCIATION, SHALL BE BORNE AND PAID FOR BY THE FREELANCERS ASSOCIATION
SO EXAMINED. THE EXPENSES OF EXAMINATION SHALL INCLUDE REIMBURSEMENT FOR
THE COMPENSATION PAID FOR SERVICES OF PERSONS EMPLOYED BY THE SUPER-
INTENDENT OR BY THE SUPERINTENDENT'S AUTHORITY TO MAKE SUCH EXAMINATION,
AND FOR THE NECESSARY TRAVELING AND LIVING EXPENSES OF THE PERSON OR
PERSONS MAKING THE EXAMINATION.
(K)(1) THE SUPERINTENDENT MAY SUSPEND OR REVOKE A DEMONSTRATION
PROGRAM WAIVER ISSUED TO A FREELANCERS ASSOCIATION IF THE SUPERINTENDENT
FINDS, AFTER NOTICE AND HEARING, THAT THE FREELANCERS ASSOCIATION HAS
FAILED TO COMPLY WITH ANY REQUIREMENT IMPOSED ON IT BY THE PROVISIONS OF
THIS CHAPTER AND IF IN THE SUPERINTENDENT'S JUDGMENT SUCH SUSPENSION OR
REVOCATION IS REASONABLY NECESSARY TO PROTECT THE INTERESTS OF THE
PEOPLE OF THIS STATE, INCLUDING:
(A) FOR ANY CAUSE THAT WOULD BE A BASIS FOR DENIAL OF AN INITIAL
APPLICATION FOR A DEMONSTRATION PROGRAM WAIVER;
(B) FAILURE TO MAINTAIN THE RESERVES REQUIRED BY SUBSECTION (H) OF
THIS SECTION; OR
(C) A DETERMINATION BY THE SUPERINTENDENT THAT THE FREELANCERS ASSOCI-
ATION HAS REFUSED TO PRODUCE ITS ACCOUNTS, RECORDS, AND FILES FOR EXAM-
INATION OR HAS REFUSED TO COOPERATE OR GIVE INFORMATION WITH RESPECT TO
THE AFFAIRS OF THE FREELANCERS HEALTH PLAN OR TO PERFORM ANY OTHER LEGAL
OBLIGATION RELATING TO SUCH AN EXAMINATION WHEN REQUIRED BY THE SUPER-
INTENDENT.
(2) ANY DEMONSTRATION PROGRAM WAIVER SUSPENDED OR REVOKED UNDER THIS
SUBSECTION SHALL BE SURRENDERED TO THE SUPERINTENDENT, AND THE FREELANC-
ERS ASSOCIATION SHALL NOTIFY ALL MEMBERS OF THAT DECISION IN SUCH FORM
AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE, BUT NOT LATER THAN TEN
DAYS AFTER RECEIPT OF NOTICE OF THE SUPERINTENDENT'S DECISION REQUIRING
SUSPENSION OR REVOCATION. IN ADDITION, THE FREELANCERS ASSOCIATION SHALL
A. 6519--B 7
SUBMIT A PLAN FOR THE SUPERINTENDENT'S APPROVAL FOR WINDING UP THE
PLAN'S AFFAIRS IN AN ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT
OF ALL BENEFITS, IN SUCH FORM AND MANNER AS THE SUPERINTENDENT MAY
PRESCRIBE.
(3) NOTWITHSTANDING SUBDIVISION TWO OF SECTION EIGHTY-SEVEN OF THE
PUBLIC OFFICERS LAW, ALL FINAL DECISIONS TO SUSPEND OR REVOKE THE DEMON-
STRATION PROGRAM WAIVER WITH REGARD TO A FREELANCERS HEALTH PLAN SHALL
BE PUBLIC.
(L) IN ANY CASE IN WHICH A FREELANCERS ASSOCIATION DETERMINES THAT
THERE IS A REASON TO BELIEVE THAT THE FREELANCERS HEALTH PLAN WILL
TERMINATE, THE FREELANCERS ASSOCIATION SHALL SO INFORM THE SUPERINTEN-
DENT AT LEAST SIXTY DAYS PRIOR THERETO, AND SHALL FILE A SWORN STATEMENT
WITH THE SUPERINTENDENT CONCERNING ALL CURRENT AND FUTURE LIABILITIES
UNDER ITS DISCONTINUED PLAN. THE FREELANCERS ASSOCIATION SHALL SUBMIT A
PLAN FOR THE SUPERINTENDENT'S APPROVAL FOR WINDING UP THE PLAN'S AFFAIRS
IN AN ORDERLY MANNER DESIGNED TO RESULT IN TIMELY PAYMENT OF ALL BENE-
FITS, IN SUCH FORM AND MANNER AS THE SUPERINTENDENT MAY PRESCRIBE.
(M) NO PART OF ANY FUNDS OF THE FREELANCERS ASSOCIATION, AS THEY
PERTAIN TO THE FREELANCERS HEALTH PLAN, SHALL BE SUBJECT TO THE CLAIMS
OF GENERAL CREDITORS OF THE FREELANCERS ASSOCIATION UNTIL ALL PLAN BENE-
FITS AND OTHER PLAN OBLIGATIONS HAVE BEEN SATISFIED. UNTIL SUCH TIME,
THE FREELANCERS ASSOCIATION SHALL CONTINUE TO MAINTAIN AND FUND THE
RESERVE FUNDS REQUIRED TO BE ESTABLISHED UNDER SUBSECTION (H) OF THIS
SECTION. IF AT ANY TIME THE SUPERINTENDENT DETERMINES THAT ADDITIONAL
FUNDS SHALL BE DEPOSITED IN THE RESERVE FUNDS, THEN THE FREELANCERS
ASSOCIATION SHALL MAKE THE DEPOSIT WITHIN THIRTY DAYS OF THE SUPERINTEN-
DENT'S DETERMINATION.
(N) A FREELANCERS ASSOCIATION THAT RECEIVES A DEMONSTRATION PROGRAM
WAIVER UNDER THIS SECTION SHALL SUBMIT PERIODIC REPORTS TO THE SUPER-
INTENDENT SUFFICIENT TO ENABLE THE SUPERINTENDENT TO EVALUATE THE EFFEC-
TIVENESS OF THE DEMONSTRATION PROGRAM. SUCH REPORTS SHALL INCLUDE A
COMPARISON OF THE COST OF BENEFITS OBTAINED UNDER THE PROGRAM TO OTHER
AVAILABLE INSURANCE OPTIONS AND ANY OTHER INFORMATION REQUIRED BY THE
SUPERINTENDENT.
(O) A FREELANCERS ASSOCIATION SHALL NOT ISSUE A STOP-LOSS INSURANCE
POLICY.
(P) A FREELANCERS HEALTH PLAN SHALL PROVIDE BENEFITS ONLY TO INDEPEND-
ENT WORKERS WHO ARE MEMBERS OF THE FREELANCERS ASSOCIATION SPONSORING
THE PLAN AND SUCH MEMBERS' SPOUSES, CHILDREN AND ALL OTHER PERSONS
CHIEFLY DEPENDENT UPON THE MEMBERS FOR SUPPORT AND MAINTENANCE;
PROVIDED, HOWEVER, A FREELANCERS HEALTH PLAN SHALL NOT ESTABLISH RULES
OF ELIGIBILITY, INCLUDING CONTINUED ELIGIBILITY, OF ANY INDIVIDUAL OR
DEPENDENT OF THE INDIVIDUAL BASED ON ANY OF THE FOLLOWING FACTORS:
(1) HEALTH STATUS;
(2) MEDICAL CONDITION;
(3) CLAIMS EXPERIENCE;
(4) RECEIPT OF HEALTH CARE;
(5) MEDICAL HISTORY;
(6) GENETIC INFORMATION;
(7) EVIDENCE OF INSURABILITY, INCLUDING CONDITIONS ARISING OUT OF ACTS
OF DOMESTIC VIOLENCE; OR
(8) DISABILITY.
(Q) THE SUPERINTENDENT MAY PROMULGATE SUCH REGULATIONS AS THE SUPER-
INTENDENT DEEMS NECESSARY TO IMPLEMENT THE PROVISIONS OF THIS SECTION
AND TO ENSURE THAT THE PLANS ESTABLISHED UNDER THIS SECTION ARE IN THE
BEST INTERESTS OF MEMBERS OF THE FREELANCERS ASSOCIATION AND THE
A. 6519--B 8
MEMBER'S SPOUSE, CHILDREN AND OTHER PERSONS CHIEFLY DEPENDENT UPON THE
MEMBERS FOR SUPPORT AND MAINTENANCE.
(R) EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION, ANY FREELANCERS
ASSOCIATION THAT VIOLATES THIS SECTION SHALL BE SUBJECT TO THE PENALTIES
SET FORTH IN SECTION ONE HUNDRED NINE OF THIS CHAPTER.
(S) NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS SECTION, ANY
ACTIVITIES THAT MAY OR MUST BE CARRIED OUT BY A FREELANCERS ASSOCIATION
UNDER THIS SECTION MAY BE CARRIED OUT ON BEHALF OF THE FREELANCERS ASSO-
CIATION BY ANOTHER ENTITY WHOLLY OWNED OR CONTROLLED BY THE FREELANCERS
ASSOCIATION, PROVIDED THAT ANY ACTIVITIES CARRIED OUT ON BEHALF OF THE
FREELANCERS ASSOCIATION BY ANOTHER ENTITY WHOLLY OWNED OR CONTROLLED BY
THE FREELANCERS ASSOCIATION SHALL BE SUBJECT TO ALL PROVISIONS OF THIS
SECTION.
S 2. Subsections (b) and (c) of section 4237-a of the insurance law,
as amended by chapter 246 of the laws of 2012, are amended to read as
follows:
(b) "Stop-loss insurance" means an insurance policy whereby the insur-
er agrees to pay claims or indemnify an employer for losses incurred
under a self-insured employee benefit plan or a student health plan as
authorized by section one thousand one hundred twenty-four of this chap-
ter, OR THE FREELANCERS HEALTH PLAN DEMONSTRATION PROGRAM AS AUTHORIZED
BY SECTION ONE THOUSAND ONE HUNDRED TWENTY-FIVE OF THIS CHAPTER, in
excess of specified loss limits for individual claims and/or for all
claims combined, or any similar arrangement.
(c) A stop-loss insurance policy delivered, issued for delivery, or
entered into in this state shall clearly describe:
(1) the entire money or other consideration for the policy;
(2) the time at which the insurance takes effect and terminates;
(3) the specified per-claim, per-employee or, in the case of a student
health plan under section one thousand one hundred twenty-four of this
chapter, per student, OR IN THE CASE OF THE FREELANCERS HEALTH PLAN
DEMONSTRATION PROGRAM UNDER SECTION ONE THOUSAND ONE HUNDRED TWENTY-FIVE
OF THIS CHAPTER, PER MEMBER, or aggregate amount of claims above which
payment or reimbursement is to be made by the insurer; and
(4) the payments to be made by the insurer once the specified stop-
loss thresholds have been exceeded.
S 3. Subsection (k) of section 1108 of the insurance law, as added by
chapter 246 of the laws of 2012, is relettered subsection (l) and a new
subsection (m) is added to read as follows:
(M) A FREELANCERS ASSOCIATION, AS DEFINED IN SECTION ONE THOUSAND ONE
HUNDRED TWENTY-FIVE OF THIS ARTICLE, THAT OBTAINS AND MAINTAINS A DEMON-
STRATION PROGRAM WAIVER FROM THE SUPERINTENDENT AND COMPLIES WITH THE
REQUIREMENTS OF SECTION ONE THOUSAND ONE HUNDRED TWENTY-FIVE OF THIS
ARTICLE, TO THE EXTENT THEREIN STATED.
S 4. This act shall take effect immediately and shall expire and be
deemed repealed December 31, 2014.