BILL NUMBER: S8995

SPONSOR: SEWARD
 
TITLE OF BILL:  An act to amend chapter 589 of the laws of 2015,
amending the insurance law relating to catastrophic or reinsurance
coverage issued to certain small groups, in relation to the effective-
ness thereof; and to amend chapter 588 of the laws of 2015, amending the
insurance law relating to catastrophic or reinsurance coverage issued to
certain small groups, in relation to the effectiveness thereof

 
PURPOSE:

To extend provisions allowing for the sale of stop loss coverages to
certain small groups and exempting certain municipal corporations from
small group rating standards.

 
SUMMARY OF PROVISIONS:

Section one of the bill would extend for an additional five years the
provisions of chapter 589 of the laws of 2015, as amended by chapter 12
of the laws of 2016, which provided that small groups between the size
              

of 51-100 who had reinsurance policies in effect on 1/1/2015 may contin-
ue to eligible to renew such policy or purchase re-insurance between
1/1/2016 and 1/1/2017 and renew such policy thereafter, and which also
exempted municipal corporations with member employers with 100 or fewer
employees from small group rating standards.

Section two of the bill would extend for an additional five years the
provisions of chapter 588 of the laws of 2015, as amended by chapter 12
of the laws of 2016, which provided that small groups between the size
of 51-100 who had reinsurance policies in effect on 1/1/2015 may contin-
ue to eligible to renew such policy or purchase re-insurance between
1/1/2016 and 1/1/2017 and renew such policy thereafter, and which also
exempted municipal corporations with member employers with 100 or fewer
employees from small group rating standards.

Section three of the bill provides the effective date.

 
JUSTIFICATION:

The ACA expanded the "small group" market from 2-50 to 2-100 employees
or members effective January 1st, 2016 in order to place downward pres-
sure on premiums through the law of large numbers by including larger
firms within the group. Expanding the small group up to 100 members or
employees required the sale of community-rated policies-and prohibited
the sale of stop loss, reinsurance or catastrophic coverages-to groups
with between 51-100 members or employees for the first time. This
included both private sector firms and members of municipal cooperatives
and schools, which are members of municipal cooperative associations
pursuant to article five-G of the general municipal law. Chapters 588
and 589 of 2015, as amended by chapter 12 of 2016, grandfathered 51-100
member groups which had self-insurance with stop loss coverage as of
January 1st, 2015, as long as they kept their coverage in effect and
also exempted municipal corporations with member employers with 100 or
fewer employees from small group rating standards. This bill would
extend these provisions for an additional five years.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.