§ 4317 — Rating of individual and small group health insurance contracts

§ 4317. Rating of individual and small group health insurance\ncontracts. (a) (1) No individual health insurance contract and no group\nhealth insurance contract covering between one and fifty employees or\nmembers of the group, or between one and one hundred employees or\nmembers of the group for policies issued or renewed on or after January\nfirst, two thousand sixteen exclusive of spouses and dependents,\nincluding contracts for which the premiums are paid by a remitting agent\nfor a group, hereinafter referred to as a small group, providing\nhospital and/or medical benefits, including Medicare supplemental\ninsurance, shall be issued in this state unless such contract is\ncommunity rated and, notwithstanding any other provisions of law, the\nunderwriting of such contract involves no more than the imposition of a\npre-existing condition limitation if otherwise permitted by this\narticle. (2) Any individual, and dependents of such individual, and any\nsmall group, including all employees or group members and dependents of\nemployees or members, applying for individual or small group health\ninsurance coverage including Medicare supplemental insurance, but not\nincluding coverage issued on or after January first, two thousand\nfourteen specified in subsection (l) of section four thousand three\nhundred four, and section four thousand three hundred twenty-eight of\nthis chapter, must be accepted at all times throughout the year for any\nhospital and/or medical coverage offered by the corporation to\nindividuals or small groups in this state. (3) Once accepted for\ncoverage, an individual or small group cannot be terminated by the\ninsurer due to claims experience. Termination of coverage for\nindividuals or small groups may be based only on one or more of the\nreasons set forth in subsection (c) of section four thousand three\nhundred four or subsection (j) of section four thousand three hundred\nfive of this article. (4) For the purposes of this section, "community\nrated" means a rating methodology in which the premium for all persons\ncovered by a policy or contract form is the same, based on the\nexperience of the entire pool of risks of all individuals or small\ngroups covered by the corporation without regard to age, sex, health\nstatus, tobacco usage or occupation excluding those individuals of small\ngroups covered by Medicare supplemental insurance. For medicare\nsupplemental insurance coverage, "community rated" means a rating\nmethodology in which the premiums for all persons covered by a policy or\ncontract form is the same based on the experience of the entire pool of\nrisks covered by that policy or contract form without regard to age,\nsex, health status, tobacco usage or occupation.\n (b) (1) The superintendent may set standard premium tiers and standard\nrating relativities between tiers applicable to all contracts subject to\nthis section. The superintendent may also set a standard relativity\napplicable to child-only contracts issued pursuant to section 1302(f) of\nthe affordable care act, 42 U.S.C. § 18022(f). The relativity for\nchild-only contracts must be actuarially justifiable using the aggregate\nexperience of corporations to prevent the charging of unjustified\npremiums. The superintendent may adjust such premium tiers and\nrelativities periodically based upon the aggregate experience of\ncorporations issuing contract forms subject to this section. (2) A\ncorporation shall establish separate community rates for individuals as\nopposed to small groups. (3) If a corporation is required to issue a\ncontract to individual proprietors pursuant to subsection (f) of this\nsection, such contract shall be subject to the requirements of\nsubsection (a) of this section.\n (c) (1) The superintendent shall permit the use of separate community\nrates for reasonable geographic regions, which may, in a given case,\ninclude a single county. The regions shall be approved by the\nsuperintendent as part of the rate filing. The superintendent shall not\nrequire the inclusion of any specific geographic regions within the\nproposed community rated regions selected by the corporation in its rate\nfiling so long as the corporation's proposed regions do not contain\nconfigurations designed to avoid or segregate particular areas within a\ncounty covered by the corporation's community rates. (2) Beginning on\nJanuary first, two thousand fourteen, for every contract subject to this\nsection that provides physician services, medical, major medical or\nsimilar comprehensive-type coverage, except for Medicare supplemental\ninsurance, corporations shall use standardized regions established by\nthe superintendent.\n (d) * (1) (A) This section shall also apply to a contract issued to a\ngroup defined in subsection (c) of section four thousand two hundred\nthirty-five of this chapter, including but not limited to an association\nor trust of employers, if the group includes one or more member\nemployers or other member groups having one hundred or fewer employees\nor members exclusive of spouses and dependents. For a contract issued or\nrenewed on or after January first, two thousand fourteen, if the group\nincludes one or more member small group employers eligible for coverage\nsubject to this section, then such member employers shall be classified\nas small groups for rating purposes and the remaining members shall be\nrated consistent with the rating rules applicable to such remaining\nmembers pursuant to paragraph two of this subsection. (B) Subparagraph A\nof this paragraph shall not apply to either the renewal of a contract\nissued to a group or the issuance, between January first, two thousand\nsixteen and December thirty-first, two thousand sixteen, of a contract,\nand any renewal thereof, to a group, provided that the following three\nrequirements are met: (I) the group had been issued a contract that was\nin effect on July first, two thousand fifteen; (II) the group had member\nemployers, who, on or after July first, two thousand fifteen, have\nbetween fifty-one and one hundred employees, exclusive of spouses and\ndependents; and (III) the group is either: (i) comprised entirely of one\nor more municipal corporations or districts (as such terms are defined\nin section one hundred nineteen-n of the general municipal law); or (ii)\ncomprised entirely of nonpublic schools providing education in any grade\nfrom pre-kindergarten through twelfth grade.\n * NB Effective until December 28, 2028\n * (1) This section shall also apply to a contract issued to a group\ndefined in subsection (c) of section four thousand two hundred\nthirty-five of this chapter, including but not limited to an association\nor trust of employers, if the group includes one or more member\nemployers or other member groups which have one hundred or fewer\nemployees or members exclusive of spouses and dependents. For contracts\nissued or renewed on or after January first, two thousand fourteen, if\nthe group includes one or more member small group employers eligible for\ncoverage subject to this section, then such member employers shall be\nclassified as small groups for rating purposes and the remaining members\nshall be rated consistent with the rating rules applicable to such\nremaining members pursuant to paragraph two of this subsection.\n * NB Effective December 28, 2028\n (2) If a contract is issued to a group defined in subsection (c) of\nsection four thousand two hundred thirty-five of this chapter including\nassociation groups, that includes one or more individual or individual\nproprietor members, then for rating purposes the corporation shall\ninclude such members in its individual pool of risks in establishing\npremium rates for such members.\n (3) A corporation shall provide specific claims experience to a\nmunicipal corporation, as defined in subsection (f) of section four\nthousand seven hundred two of this chapter, covered by the corporation\nunder a community rated contract when the municipal corporation requests\nits claims experience for purposes of forming or joining a municipal\ncooperative health benefit plan certified pursuant to article\nforty-seven of this chapter. Notwithstanding the foregoing provisions,\nno corporation shall be required to provide more than three years'\nclaims experience to a municipal corporation making this request.\n (e) * (1) Notwithstanding any other provision of this chapter, no\ninsurer, subsidiary of an insurer, or controlled person of a holding\ncompany system may act as an administrator or claims paying agent, as\nopposed to an insurer, on behalf of small groups which, if they\npurchased insurance, would be subject to this section. No insurer may\nprovide stop loss, catastrophic or reinsurance coverage to small groups\nwhich, if they purchased insurance, would be subject to this section.\nProvided, however, the provisions of this paragraph shall not apply to:\n(A) the renewal of stop loss, catastrophic or reinsurance coverage\nissued and in effect on January first, two thousand fifteen to small\ngroups covering between fifty-one and one hundred employees or members\nof the group; and (B) the issuance between January first, two thousand\nsixteen, and December thirty-first, two thousand sixteen, of stop loss,\ncatastrophic or reinsurance coverage, and any renewal thereof, to a\nsmall group covering between fifty-one and one hundred employees or\nmembers of the group, provided that such group had stop loss,\ncatastrophic or reinsurance coverage issued and in effect on January\nfirst, two thousand fifteen.\n * NB Effective until December 28, 2028\n * (1) Notwithstanding any other provision of this chapter, no insurer,\nsubsidiary of an insurer, or controlled person of a holding company\nsystem may act as an administrator or claims paying agent, as opposed to\nan insurer, on behalf of small groups which, if they purchased\ninsurance, would be subject to this section. No insurer, subsidiary of\nan insurer, or controlled person of a holding company may provide stop\nloss, catastrophic or reinsurance coverage to small groups which, if\nthey purchased insurance, would be subject to this section.\n * NB Effective December 28, 2028\n (2) This subsection shall not apply to coverage insuring a plan that\nwas in effect on or before December thirty-first, nineteen hundred\nninety-one and was issued to a group that includes member small\nemployers or other member small groups, including but not limited to\nassociation groups, provided that (A) acceptance of additional small\nmember employers (or other member groups comprised of fifty or fewer\nemployees or members, exclusive of spouses and dependents) into the\ngroup on or after June first, nineteen hundred ninety-two and before\nApril first, nineteen hundred ninety-four does not exceed an amount\nequal to ten percent per year of the total number of persons covered\nunder the group as of June first, nineteen hundred ninety-two, but\nnothing in this subparagraph shall limit the addition of larger member\nemployers; (B) (i) after April first, nineteen hundred ninety-four, the\ngroup thereafter accepts member small employers and member small groups\nwithout underwriting by any more than the imposition of a pre-existing\ncondition limitation as permitted by this article and the cost for\nparticipation in the group for all persons covered shall be the same\nbased on the experience of the entire pool of risks covered under the\nentire group, without regard to age, sex, health status or occupation;\nand; (ii) once accepted for coverage, an individual or small group\ncannot be terminated due to claims experience; (C) the corporation has\nregistered the names of such groups, including the total number of\npersons covered as of June first, nineteen hundred ninety-two, with the\nsuperintendent, in a form prescribed by the superintendent, on or before\nApril first, nineteen hundred ninety-three and shall report annually\nthereafter until such groups comply with the provisions of subparagraph\n(B) of this paragraph; and (D) the types or categories of employers or\ngroups eligible to join the association are not altered or expanded\nafter June first, nineteen hundred ninety-two.\n (3) A corporation may apply to the superintendent for an extension or\nextensions of time beyond April first, nineteen hundred ninety-four in\nwhich to implement the provisions of this subsection as they relate to\ngroups registered with the superintendent pursuant to subparagraph (C)\nof paragraph two of this subsection; any such extension or extensions\nmay not exceed two years in aggregate duration, and the ten percent per\nyear limitation of subparagraph (A) of paragraph two of this subsection\nshall be reduced to five percent per year during the period of any such\nextension or extensions. Any application for an extension shall\ndemonstrate that a significant financial hardship to such group would\nresult from such implementation.\n (f)(1) If the corporation issues coverage to an association group\n(including chambers of commerce), as defined in subparagraph (K) of\nparagraph one of subsection (c) of section four thousand two hundred\nthirty-five of this chapter, then the corporation shall issue the same\ncoverage to individual proprietors who purchase coverage through the\nassociation group as the corporation issues to groups that purchase\ncoverage through the association group; provided, however, that a\ncorporation that, on the effective date of this subsection, is issuing\ncoverage to individual proprietors not connected with an association\ngroup, may continue to issue such coverage provided that the coverage is\notherwise in accordance with this subsection and all other applicable\nprovisions of law.\n (2) For coverage purchased pursuant to this subsection through\nDecember thirty-first, two thousand thirteen, individual proprietors\nshall be classified in their own community rating category, provided\nhowever, up to and including December thirty-first, two thousand\nthirteen, the premium rate established for individual proprietors\npurchased pursuant to paragraph one of this subsection shall not be\ngreater than one hundred fifteen percent of the rate established for the\nsame coverage issued to groups. Coverage purchased or renewed pursuant\nto this subsection on or after January first, two thousand fourteen\nshall be classified in the individual rating category.\n (3) The corporation may require members of the association purchasing\nhealth insurance to verify that all employees electing health insurance\nare legitimate employees of the employers, as documented on New York\nstate tax form NYS-45-ATT-MN or comparable documentation. In order to be\neligible to purchase health insurance pursuant to this subsection and\nobtain the same group insurance products as are offered to groups, a\nsole employee of a corporation or a sole proprietor of an unincorporated\nbusiness or entity must (A) work at least twenty hours per week, (B) if\npurchasing the coverage through an association group, be a member of the\nassociation for at least sixty days prior to the effective date of the\ninsurance contract, and (C) present a copy of the following\ndocumentation to the corporation or health plan administrator on an\nannual basis:\n (i) NYS tax form 45-ATT, or comparable documentation of active\nemployee status;\n (ii) for an unincorporated business, the prior year's federal income\ntax Schedule C for an incorporated business subject to Subchapter S with\na sole employee, federal income tax Schedule E for other incorporated\nbusinesses with a sole employee, a W-2 annual wage statement, or federal\ntax form 1099 with federal income tax Schedule F; or\n (iii) for a business in business for less than one year, a cancelled\nbusiness check, a certificate of doing business, or appropriate tax\ndocumentation; and\n (iv) such other documentation as may be reasonably required by the\ninsurer as approved by the superintendent to verify eligibility of an\nindividual to purchase health insurance pursuant to this subsection.\n (4) Notwithstanding the provisions of item (I) of clause (i) of\nsubparagraph (K) of paragraph one of subsection (c) of section four\nthousand two hundred thirty-five of this chapter, for purposes of this\nsection, an association group shall include chambers of commerce with\nless than two hundred members and which are 501C3 or 501C6\norganizations.\n