§ 4322-a. Fund for standardized individual enrollee direct payment
contracts which provide out-of-plan benefits. (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 which
provide out-of-plan benefits issued pursuant to section four thousand
three hundred twenty-two of this article. The fund established by the
superintendent pursuant to this section shall be known as "the direct
payment out-of-plan stop loss fund". Commencing in calendar year two
thousand, health maintenance organizations shall be eligible to receive
reimbursement from the direct payment out-of-plan 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-two 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 contracts issued
pursuant to section four thousand three hundred twenty-two of this
article.

(b) The superintendent shall promulgate regulations that set forth
procedures for the operation of the direct payment out-of-plan 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
that 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 out-of-plan 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 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 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 stop loss fund.
Otherwise, such excess funds shall be carried forward and shall not
affect the monies appropriated for the direct payment out-of-plan 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 out-of-plan 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 out-of-plan 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
out-of-plan 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 out-of-plan 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.