§ 4321-a. Fund for standardized individual enrollee direct payment
contracts. (a) The superintendent shall establish a fund from which
health maintenance organizations may receive reimbursement, to the
extent of funds available therefor, for claims paid by such health
maintenance organizations for members covered under standardized
individual enrollee direct payment contracts issued pursuant to section
four thousand three hundred twenty-one of this article. The fund
established by the superintendent pursuant to this section shall be
known as the direct payment stop loss fund. Commencing in calendar year
two thousand, health maintenance organizations shall be eligible to
receive reimbursement from the direct payment stop loss fund for ninety
percent of claims paid between twenty thousand and one hundred thousand
dollars in a calendar year for any member covered under a contract
issued pursuant to section four thousand three hundred twenty-one of
this article. For the purposes of this section, claims shall include
health care claims paid by a health maintenance organization on behalf
of a covered member pursuant to such standardized direct payment
contracts.

(b) The superintendent shall promulgate regulations setting forth
procedures for the operation of the direct payment stop loss fund and
the distribution of monies therefrom.

(c) Claims shall be reported and funds shall be distributed on a
calendar year basis. Claims shall be eligible for reimbursement only for
the calendar year in which the claims are paid. Once claims paid on
behalf of a member reach or exceed one hundred thousand dollars in a
given calendar year, no further claims paid on behalf of such member in
such calendar year shall be eligible for reimbursement.

(d) Each health maintenance organization shall submit a request for
reimbursement from the stop loss fund on a form prescribed by the
superintendent. Such request for reimbursement shall be submitted no
later than April first following the end of the calendar year for which
the reimbursement request is being made. The superintendent may require
health maintenance organizations to submit such claims data in
connection with the reimbursement request as he deems necessary to
enable him to distribute monies and oversee the operation of the direct
payment stop loss fund. The superintendent may require that such data be
submitted on a per member, aggregate and/or categorical basis.

(e) The superintendent shall calculate the total claims reimbursement
amount for all health maintenance organizations for the calendar year
for which claims are being reported.

(1) In the event that the total amount requested for reimbursement by
all health maintenance organizations for a calendar year exceeds funds
available for distribution for claims paid by all health maintenance
organizations during that same calendar year, the superintendent shall
provide for the pro-rata distribution of the available funds. Each
health maintenance organization shall be eligible to receive only such
proportionate amount of the available funds as the individual health
maintenance organization's total eligible claims paid bears to the total
eligible claims paid by all health maintenance organizations.

(2) In the event that (A) funds available for distribution for claims
paid by all health maintenance organizations during a calendar year
exceeds the total amount requested for reimbursement by all health
maintenance organizations during that same calendar year, and (B) the
total amount requested for reimbursement by all health maintenance
organizations from the direct payment out-of-plan stop loss fund exceeds
the amount available for distribution from such fund, then any excess
funds shall be reallocated for distribution to the direct payment
out-of-plan stop loss fund. Otherwise, such excess funds shall be
carried forward and will not affect monies appropriated for the direct
payment stop loss fund in the next calendar year.

(f) Upon the request of the superintendent, each health maintenance
organization shall be required to furnish such data as the
superintendent deems necessary to oversee the operation of the direct
payment stop loss fund. Such data shall be furnished in a form
prescribed by the superintendent.

(g) The superintendent may obtain the services of an organization to
administer the direct payment stop loss fund. The superintendent shall
establish guidelines for the submission of proposals by organizations
for the purposes of administering the fund. The superintendent shall
make a determination whether to approve, disapprove or recommend
modification to the proposal of an applicant to administer the fund. An
organization approved to administer the fund shall submit reports to the
superintendent in such form and at times as may be required by the
superintendent in order to facilitate evaluation and ensure orderly
operation of the fund, including, but not limited to an annual report of
the affairs and operations of the fund, such report to be delivered to
the superintendent and to the chairs of the senate finance committee and
assembly ways and means committee. An organization approved to
administer the fund shall maintain records in a form prescribed by the
superintendent and which shall be available for inspection by or at the
request of the superintendent. The superintendent shall determine the
amount of compensation to be allocated to an approved organization as
payment for fund administration. Compensation shall be payable from the
direct payment stop loss fund. An organization approved to administer
the fund may be removed by the superintendent and must cooperate in the
orderly transition of services to another approved organization or to
the superintendent.

(h) If the superintendent deems it appropriate for the proper
administration of the direct payment stop loss fund, the administrator
of the fund, on behalf of and with the prior approval of the
superintendent, shall be authorized to purchase stop loss insurance
and/or reinsurance from an insurance company licensed to write such type
of insurance in this state. Such stop loss insurance and/or reinsurance
may be purchased to the extent of funds available therefor within such
funds which are available for purposes of the stop loss fund.