NY State Senate Bill 2015-S7104

Senate Bill S7104

2015-2016 Legislative Session

Relates to the definition of small group for the purposes of health insurance policies and contracts; repealer

download bill text pdf

Archive: Last Bill Status - In Assembly Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 10, 2016	referred to insurance delivered to assembly passed senate
May 03, 2016	advanced to third reading
Apr 12, 2016	2nd report cal.
Apr 11, 2016	1st report cal.550
Mar 28, 2016	referred to insurance

Votes

- May 10, 2016 - Floor Vote
  S7104
  
  58
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  5
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: May 10, 2016
      
      aye (58)
      
      Addabbo Jr.
      
      Akshar
      
      Amedore
      
      Avella
      
      Bonacic
      
      Boyle
      
      Breslin
      
      Carlucci
      
      Comrie
      
      Croci
      
      DeFrancisco
      
      Dilan
      
      Espaillat
      
      Farley
      
      Felder
      
      Flanagan
      
      Funke
      
      Gallivan
      
      Gianaris
      
      Golden
      
      Griffo
      
      Hamilton
      
      Hannon
      
      Hassell-Thompson
      
      Hoylman-Sigal
      
      Kaminsky
      
      Kennedy
      
      Klein
      
      Krueger
      
      LaValle
      
      Lanza
      
      Latimer
      
      Little
      
      Marcellino
      
      Marchione
      
      Martins
      
      Montgomery
      
      Murphy
      
      O'Mara
      
      Ortt
      
      Panepinto
      
      Parker
      
      Peralta
      
      Perkins
      
      Persaud
      
      Ranzenhofer
      
      Ritchie
      
      Rivera
      
      Robach
      
      Savino
      
      Serino
      
      Serrano
      
      Squadron
      
      Stavisky
      
      Stewart-Cousins
      
      Valesky
      
      Venditto
      
      Young
      
      excused (5)
      
      Diaz
      
      Larkin
      
      Nozzolio
      
      Sanders Jr.
      
      Seward
  Apr 11, 2016 - Insurance Committee Vote
  S7104
  
  19
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Insurance Committee Vote: Apr 11, 2016
      
      aye (19)
      
      Avella
      
      Breslin
      
      Carlucci
      
      Golden
      
      Hamilton
      
      Kennedy
      
      LaValle
      
      Lanza
      
      Larkin
      
      Latimer
      
      Martins
      
      Murphy
      
      O'Mara
      
      Panepinto
      
      Parker
      
      Sanders Jr.
      
      Serino
      
      Seward
      
      Venditto

co-Sponsors

2015-S7104 (ACTIVE) - Details

See Assembly Version of this Bill:: A10402
Current Committee:: Assembly Insurance
Law Section:: Insurance Law
Laws Affected:: Amd §§3231 & 4317, Ins L; rpld §7, Chap 12 of 2016
Versions Introduced in Other Legislative Sessions:: 2017-2018: S425, A7077
2019-2020: S5161, A5285
2021-2022: S3567

2015-S7104 (ACTIVE) - Summary

Amends the definition of "small group" for purposes of health insurance policies and contracts to fifty employees or fewer; and repeals provisions requiring the superintendent to conduct an impact study.

2015-S7104 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S7104

 TITLE OF BILL :  An act to amend the insurance law, in relation to
the definition of small group; and to repeal section 7 of chapter 12
of the laws of 2016 relating to directing the superintendent of
financial services to contract with an independent entity to conduct
an assessment regarding the impact of the prohibition on the sale of
stop loss, catastrophic and reinsurance coverage to the small group
market relating thereto

 PURPOSE :

To conform the insurance law definition of "small group" with the
definition of "small employer" under the recently enacted federal
Protecting Affordable Coverage for Employees (PACE) Act (Public Law
114-60, effective October 7, 2015), which amended applicable
provisions of the federal Patient Protection and Affordable Care Act
(ACA) (Public Law 111-148).

 SUMMARY OF PROVISIONS :

Section 1 amends insurance law section 3231(a)(1) to return the
definition of "small group" to 1-50 employees or members of such
group.

Section 2 amends insurance law section 3231(a)(3) to return the

definition of "small group" to 1-50 employees or members of such
group.

Section 3 amends insurance law section 3231(h)(I) to harmonize the
provisions of such subsection with the definition of "small group."

Section 4 amends insurance law section 4317(a)(1) to return the
definition of "small group" to 1-50 employees or members of such
group.

Section 5 amends insurance law section 4317(e)(1) to harmonize the
provisions of such subsection with the definition of "small group."

Section 6 amends insurance law section 3231(g)(1) to harmonize the
provisions of such subsection with the definition of "small group."

Section 7 amends insurance law section 4317(d)(1) to harmonize the
provisions of such subsection with the definition of "small group."

Section 8 repeals section 7 of chapter 12 of the laws of 2016.

Section 9 is the effective date.

 JUSTIFICATION :

The historic size of the small group market has been employers with 50
or fewer employees. State regulators, in every state, either via law
or administrative rule had established this small group size at 1-50
for their local insurance market.

The federal ACA, amongst other things, changed the definition of
"small employer" from 1-50 employees to 1-100 employees, as of January
I, 2016. As part of the passage of the State Fiscal Year (SFY) 2013-14
New York State Budget (C.56, L. 2013), the State amended the
definition of "small group" in the NY insurance law to 1-100 employees
or members, to conform with the federal ACA definition, effective
January 1, 2016.

This expansion of the definition of "small group" to 1-100 employees
or members of such group, has had the unintended consequence of
increasing the costs of health insurance coverage for groups of
51-100, by virtue of raising premium rates or subscriber costs
together with higher deductibles and co-pays, coupled with fewer
available policy choices from insurance carriers or health plans, and
narrower healthcare provider panels, both in and out of network. The
small group definitional expansion has also caused certain midsized,
self-insured groups in the 51-100 range, to lose their stop loss
insurance or catastrophic coverage, since this coverage cannot be
legally sold into the NY small group market.

Trade organizations, business groups and market participants
nationwide supported changes to the ACA that repealed this
requirement. The bipartisan PACE Act was intended to enact market
reforms to revise the ACA definition of small employer back to 1-50,
to mitigate such market disruptions in the several states. The PACE
Act passed Congress unanimously and was signed by President Obama in
the fall of 2015. Since that time, nearly every state has adjusted
either by legislation, regulation or administrative order their small
group size to remain at 50 or below. Four states have not; California,
Colorado, New York and Vermont.

This bill would obviate the foregoing problems and market disruptions
simply by conforming the definition of "small group" in the NY
insurance law with the federal definition of "small employer" under
the PACE Act, back to 1-50 employees or members. This action is
necessary to preserve a robust health insurance marketplace, inside
and outside the New York State of Health (NYSOH) Insurance Marketplace
Exchange, for all midsized employer and union groups, together with
municipal, school and library consortiums.

 LEGISLATIVE HISTORY :

New bill.

 FISCAL IMPLICATIONS :

None to the State.  Substantial health plan cost savings are expected
to be realized by municipalities, school districts and library
consortiums.

 EFFECTIVE DATE :
Immediately, provided however that the amendments to paragraph 1 of
subsection (g) and paragraph I of subsection(h) of section 3231, and
paragraph 1 of subsection (d) and paragraph 1 of subsection (e) of
section 4317 of the insurance law made by sections 6, 3, 7, and 5 of
this act respectively shall not affect the expiration and reversion of
such paragraphs and shall expire and be deemed repealed therewith.

2015-S7104 (ACTIVE) - Bill Text download pdf

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

                                  7104

                            I N  S E N A T E

                             March 28, 2016
                               ___________

Introduced  by  Sen.  SEWARD -- 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  the  definition  of
  small group; and to repeal section 7 of chapter 12 of the laws of 2016
  relating  to  directing  the  superintendent  of financial services to
  contract with an independent entity to conduct an assessment regarding
  the impact of the prohibition on the sale of stop  loss,  catastrophic
  and reinsurance coverage to the small group market relating thereto

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

  Section 1. Paragraph 1 of subsection (a) of section 3231 of the insur-
ance law, as amended by section 69 of part D of chapter 56 of  the  laws
of 2013, is amended to read as follows:
  (1)  No  individual health insurance policy and no group health insur-
ance policy covering between one and fifty employees or members  of  the
group  [or between one and one hundred employees or members of the group
for policies issued or renewed on or after January first,  two  thousand
sixteen] exclusive of spouses and dependents, hereinafter referred to as
a  small  group,  providing  hospital and/or medical benefits, including
medicare supplemental insurance, shall be issued in  this  state  unless
such policy is community rated and, notwithstanding any other provisions
of  law, the underwriting of such policy involves no more than the impo-
sition of a pre-existing condition limitation if otherwise permitted  by
this article.
  S  2.  Paragraph  3 of subsection (a) of section 3231 of the insurance
law, as amended by section 69 of part D of chapter 56  of  the  laws  of
2013, is amended to read as follows:
  (3) Once accepted for coverage, an individual or small group cannot be
terminated  by  the insurer due to claims experience.  Termination of an
individual or small group shall be based only on  one  or  more  of  the
reasons  set  forth  in  subsection  (g)  of  section three thousand two
hundred sixteen or subsection (p) of section three thousand two  hundred
twenty-one  of  this  article.  Group  hospital and/or medical coverage,
including medicare supplemental insurance, obtained through  an  out-of-

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

                                                           LBD13988-03-6

S. 7104                             2

state  trust  covering  a group of fifty or fewer employees, [or between
one and one hundred employees for policies issued or renewed on or after
January first, two thousand sixteen,] or participating persons  who  are
residents  of this state must be community rated regardless of the situs
of delivery of the policy. Notwithstanding any other provisions of  law,
the  underwriting of such policy may involve no more than the imposition
of a pre-existing condition limitation if permitted by this article, and
once accepted for coverage, an  individual  or  small  group  cannot  be
terminated  due  to  claims  experience. Termination of an individual or
small group shall be based only on one or more of the reasons set  forth
in  subsection  (p)  of section three thousand two hundred twenty-one of
this article.
  S 3. Paragraph 1 of subsection (h) of section 3231  of  the  insurance
law, as amended by chapter 12 of the laws of 2016, is amended to read as
follows:
  (1)  Notwithstanding  any other provision of this chapter, no insurer,
subsidiary of an insurer, or controlled  person  of  a  holding  company
system may act as an administrator or claims paying agent, as opposed to
an  insurer,  on  behalf of small groups which, if they purchased insur-
ance, would be subject to this section.  No  insurer  may  provide  stop
loss,  catastrophic  or  reinsurance  coverage to small groups which, if
they purchased insurance, would be subject to this  section.  [Provided,
however,  the  provisions  of this paragraph shall not apply to: (A) the
renewal of stop loss, catastrophic or reinsurance coverage issued and in
effect on January first, two thousand fifteen to small  groups  covering
between fifty-one and one hundred employees or members of the group; and
(B)  the issuance between January first, two thousand sixteen and Decem-
ber thirty-first, two thousand sixteen, of stop  loss,  catastrophic  or
reinsurance coverage, and any renewal thereof, to a small group covering
between  fifty-one  and  one  hundred employees or members of the group,
provided that such group had  stop  loss,  catastrophic  or  reinsurance
coverage issued and in effect on January first, two thousand fifteen.]
  S  4.  Paragraph  1 of subsection (a) of section 4317 of the insurance
law, as amended by section 72 of part D of chapter 56  of  the  laws  of
2013, is amended to read as follows:
  (1) No individual health insurance contract and no group health insur-
ance contract covering between one and fifty employees or members of the
group, [or between one and one hundred employees or members of the group
for  policies  issued or renewed on or after January first, two thousand
sixteen] exclusive of spouses and dependents,  including  contracts  for
which the premiums are paid by a remitting agent for a group, hereinaft-
er referred to as a small group, providing hospital and/or medical bene-
fits, including Medicare supplemental insurance, shall be issued in this
state  unless  such contract is community rated and, notwithstanding any
other provisions of law, the underwriting of such contract  involves  no
more  than  the  imposition  of  a  pre-existing condition limitation if
otherwise permitted by this article.
  S 5. Paragraph 1 of subsection (e) of section 4317  of  the  insurance
law, as amended by chapter 12 of the laws of 2016, is amended to read as
follows:
  (1)  Notwithstanding  any other provision of this chapter, no insurer,
subsidiary of an insurer, or controlled  person  of  a  holding  company
system may act as an administrator or claims paying agent, as opposed to
an  insurer,  on  behalf of small groups which, if they purchased insur-
ance, would be subject to this section.  No  insurer  may  provide  stop
loss,  catastrophic  or  reinsurance  coverage to small groups which, if

S. 7104                             3

they purchased insurance, would be subject to this  section.  [Provided,
however,  the  provisions  of this paragraph shall not apply to: (A) the
renewal of stop loss, catastrophic or reinsurance coverage issued and in
effect  on  January first, two thousand fifteen to small groups covering
between fifty-one and one hundred employees or members of the group; and
(B) the issuance between January first, two thousand sixteen, and Decem-
ber thirty-first, two thousand sixteen, of stop  loss,  catastrophic  or
reinsurance coverage, and any renewal thereof, to a small group covering
between  fifty-one  and  one  hundred employees or members of the group,
provided that such group had  stop  loss,  catastrophic  or  reinsurance
coverage issued and in effect on January first, two thousand fifteen.]
  S  6.  Paragraph  1 of subsection (g) of section 3231 of the insurance
law, as amended by chapter 12 of the laws of 2016, is amended to read as
follows:
  (1) [(A)] This section shall also apply to policies issued to a  group
defined  in  subsection (c) of section four thousand two hundred thirty-
five of this chapter, including but not limited  to  an  association  or
trust  of  employers, if the group includes one or more member employers
or other member groups having [one hundred] FIFTY or fewer employees  or
members  exclusive  of  spouses  and  dependents. For a policy issued or
renewed on or after January first, two thousand fourteen, if  the  group
includes  one or more member small group employers eligible for coverage
subject to this section, then such member employers shall be  classified
as  small  groups for rating purposes and the remaining members shall be
rated consistent with the rating  rules  applicable  to  such  remaining
members  pursuant to paragraph two of this subsection. [(B) Subparagraph
A of this paragraph shall not apply to either the renewal  of  a  policy
issued  to  a group or the issuance, between January first, two thousand
sixteen and December thirty-first, two thousand sixteen,  of  a  policy,
and  any  renewal thereof, to a group, provided that the following three
requirements are met: (I) the group had been issued a policy that was in
effect on July first, two thousand fifteen; (II) the  group  had  member
employers,  who,  on  or  after  July  first, two thousand fifteen, have
between fifty-one and one hundred employees, exclusive  of  spouses  and
dependents; and (III) the group is either: (i) comprised entirely of one
or  more  municipal corporations or districts (as such terms are defined
in section one hundred nineteen-n of the general municipal law); or (ii)
comprised entirely of nonpublic schools providing education in any grade
from pre-kindergarten through twelfth grade.]
  S 7. Paragraph 1 of subsection (d) of section 4317  of  the  insurance
law, as amended by chapter 12 of the laws of 2016, is amended to read as
follows:
  (1)  [(A)]  This  section  shall  also apply to a contract issued to a
group defined in subsection (c) of section  four  thousand  two  hundred
thirty-five of this chapter, including but not limited to an association
or  trust of employers, if the group includes one or more member employ-
ers or other member groups having [one hundred] FIFTY or fewer employees
or members exclusive of spouses and dependents. For a contract issued or
renewed on or after January first, two thousand fourteen, if  the  group
includes  one or more member small group employers eligible for coverage
subject to this section, then such member employers shall be  classified
as  small  groups for rating purposes and the remaining members shall be
rated consistent with the rating  rules  applicable  to  such  remaining
members  pursuant to paragraph two of this subsection. [(B) Subparagraph
A of this paragraph shall not apply to either the renewal of a  contract
issued  to  a group or the issuance, between January first, two thousand

S. 7104                             4

sixteen and December thirty-first, two thousand sixteen, of a  contract,
and  any  renewal thereof, to a group, provided that the following three
requirements are met: (I) the group had been issued a contract that  was
in effect on July first, two thousand fifteen; (II) the group had member
employers,  who,  on  or  after  July  first, two thousand fifteen, have
between fifty-one and one hundred employees, exclusive  of  spouses  and
dependents; and (III) the group is either: (i) comprised entirely of one
or  more  municipal corporations or districts (as such terms are defined
in section one hundred nineteen-n of the general municipal law); or (ii)
comprised entirely of nonpublic schools providing education in any grade
from pre-kindergarten through twelfth grade.]
  S 8. Section 7 to chapter 12 of the laws of 2016 relating to directing
the superintendent of financial services to contract with an independent
entity to conduct an assessment regarding the impact of the  prohibition
on  the  sale of stop loss, catastrophic and reinsurance coverage to the
small group market, is REPEALED.
  S 9. This act shall take effect immediately;  provided,  however  that
the  amendments  to  paragraph  1  of  subsection (g) and paragraph 1 of
subsection (h) of section 3231, and paragraph 1 of  subsection  (d)  and
paragraph  1 of subsection (e) of section 4317 of the insurance law made
by sections six, three, seven and five of this  act  respectively  shall
not  affect  the  expiration  and reversion of such paragraphs and shall
expire and be deemed repealed therewith.

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Senate Bill S7104

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Sponsored By

James L. Seward