BILL NUMBER: S5581

SPONSOR: BRESLIN
 
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 making such provisions permanent; and to
amend chapter 588 of the laws of 2015, amending the insurance law relat-
ing to catastrophic or reinsurance coverage issued to certain small
groups, in relation to making such provisions permanent

 
PURPOSE:

To make provisions of law relating to catastrophic or reinsurance cover-
age issued to certain small groups permanent.

 
SUMMARY OF PROVISIONS:

Section 1. Section 5 of chapter 589 of the laws of 2015, amending the
insurance law relating to catastrophic or reinsurance coverage issued to
              

certain small groups, as amended by chapter 588 of the laws of 2019 is
amended to be made permanent.

Section 2. Section 5 of chapter 588 of the laws of 2015, amending the
insurance law relating to catastrophic or reinsurance coverage issued to
certain small groups, as amended by chapter 202 of the laws of 2019 is
amended to be made permanent.

 
JUSTIFICATION:

Prior to the passage of the Affordable Care Act (ACA), New York State
and federal law allowed employers with fifty or more eligible individ-
uals to join together in various forms to purchase experience rated
health insurance coverage for their employees and participate in Health
Insurance Consortiums or Trusts.

Upon passage of the ACA, each state was required, for a time to redefine
a "small group employer" to 1-100 from the current definition of 1-50.
In 2015, New York State changed its definition of a 'small group employ-
er' to mean one to one hundred employees.  Accordingly, the law, among
other restrictions, would result in any employer falling below the one
hundred employee threshold to no longer have the ability to participate
in an experience rated health insurance plan and instead must partic-
ipate in a community rated plan, thereby forcing them out of their
consortium or trusts.

It is estimated that at least 100 school districts have between 51-100
members. If these districts were forced out of their health care consor-
tiums they would have to go to the small group market which would
significantly increase their health care costs. Not only would the
districts with 51-100 members impacted, but so would all those remaining
in their consortiums because there would be few members in their consor-
tium and less buying power. Moreover, many of these small districts have
many retirees on their health insurance plans who are not counted in the
employee count but would also enter the community rated market.

Because of the significant financial and operational impact this change
would cause for affected districts, several laws have been enacted that
have allowed districts to remain in their health care consortiums on a
temporary basis. This bill, if enacted, would make this authorization
permanent, and eliminate the uncertainty that accompanies short term
reauthorization.

 
LEGISLATIVE HISTORY:

2015 - Chapter 588 & 589

2016 - Chapter 12

2017 - Chapter 370

2018 - Chapter 457

2019 - Chapter 202

2020 - Chapter 58

 
FISCAL IMPLICATIONS:

To be determined

 
EFFECTIVE DATE:
This act shall take effect immediately