§ 4326 — Standardized health insurance contracts for qualifying small employers and individuals

§ 4326. Standardized health insurance contracts for qualifying small\nemployers and individuals. (a) A program is hereby established for the\npurpose of making standardized health insurance contracts available to\nqualifying small employers as defined in this section. Such program is\ndesigned to encourage small employers to offer health insurance coverage\nto their employees.\n (b) Participation in the program established by this section and\nsection four thousand three hundred twenty-seven of this article is\nlimited to corporations or insurers organized or licensed under this\narticle or article forty-two of this chapter and health maintenance\norganizations issued a certificate of authority under article forty-four\nof the public health law or licensed under this article. Participation\nby all health maintenance organizations is mandatory, provided, however,\nthat such requirements shall not apply to a holder of a special purpose\ncertificate of authority issued pursuant to section four thousand four\nhundred three-a of the public health law or a health maintenance\norganization exclusively serving individuals enrolled pursuant to title\neleven of article five of the social services law, title eleven-D of\narticle five of the social services law, title one-A of article\ntwenty-five of the public health law or title eighteen of the federal\nSocial Security Act. On and after January first, two thousand one, all\nhealth maintenance organizations shall offer qualifying group health\ninsurance contracts as defined in this section. For the purposes of this\nsection and section four thousand three hundred twenty-seven of this\narticle, article forty-three corporations or article forty-two insurers\nwhich voluntarily participate in compliance with the requirements of\nthis program shall be eligible for reimbursement from the stop loss\nfunds created pursuant to section four thousand three hundred\ntwenty-seven of this article under the same terms and conditions as\nhealth maintenance organizations.\n (c) The following definitions shall be applicable to the insurance\ncontracts offered under the program established by this section:\n (1) (A) A qualifying small employer is an employer with:\n (i) not more than fifty employees;\n (ii) no group health insurance that provides benefits on an expense\nreimbursed or prepaid basis covering employees in effect during the\ntwelve month period prior to application for a qualifying group health\ninsurance contract under the program established by this section; and\n (iii) at least thirty percent of its employees receiving annual wages\nfrom the employer at a level equal to or less than thirty thousand\ndollars. The thirty thousand dollar figure shall be adjusted\nperiodically pursuant to subparagraph (D) of this paragraph.\n (B) The twelve month period set forth in item (ii) of subparagraph (A)\nof this paragraph may be adjusted by the superintendent from twelve\nmonths to eighteen months if he determines that the twelve month period\nis insufficient to prevent inappropriate substitution of qualifying\ngroup health insurance contracts for other health insurance contracts.\n (C) An employer shall cease to be a qualifying small employer if any\nhealth insurance that provides benefits on an expense reimbursed or\nprepaid basis covering an employer's employees, other than qualifying\ngroup health insurance purchased pursuant to this section, is purchased\nor otherwise takes effect subsequent to purchase of qualifying group\nhealth insurance under the program established by this section.\n (D) The wage levels utilized in subparagraph (A) of this paragraph\nshall be adjusted annually, beginning in two thousand two. The\nadjustment shall take effect on July first of each year. For July first,\ntwo thousand two, the adjustment shall be a percentage of the annual\nwage figure specified in subparagraph (A) of this paragraph. For\nsubsequent years, the adjustment shall be a percentage of the annual\nwage figure that took effect on July first of the prior year. The\npercentage adjustment shall be the same percentage by which the current\nyear's non-farm federal poverty level, as defined and updated by the\nfederal department of health and human services, for a family unit of\nfour persons for the forty-eight contiguous states and Washington, D.C.,\nchanged from the same level established for the prior year.\n (2) A qualifying group health insurance contract is a group contract\npurchased from a health maintenance organization, corporation or insurer\nby a qualifying small employer that provides the benefits set forth in\nsubsection (d) of this section. The contract must insure not less than\nfifty percent of the employees.\n (d) A qualifying group health insurance contract shall provide\ncoverage for the essential health benefits package as defined in\nparagraph three of subsection (e) of section four thousand three hundred\nsix-h of this article.\n (d-1) Covered services shall not include drugs, procedures and\nsupplies for the treatment of erectile dysfunction when provided to, or\nprescribed for use by, a person who is required to register as a sex\noffender pursuant to article six-C of the correction law, provided that:\n(1) any denial of coverage pursuant to this subsection shall provide the\nenrollee with the means of obtaining additional information concerning\nboth the denial and the means of challenging such denial; (2) all drugs,\nprocedures and supplies for the treatment of erectile dysfunction may be\nsubject to prior authorization by corporations, insurers or health\nmaintenance organizations for the purposes of implementing this\nsubsection; and (3) the superintendent shall promulgate regulations to\nimplement the denial of coverage pursuant to this subsection giving\nhealth maintenance organizations, corporations and insurers at least\nsixty days following promulgation of the regulations to implement their\ndenial procedures pursuant to this subsection.\n (d-2) No person or entity authorized to provide coverage under this\nsection shall be subject to any civil or criminal liability for damages\nfor any decision or action pursuant to subsection (d-1) of this section,\nmade in the ordinary course of business if that authorized person or\nentity acted reasonably and in good faith with respect to such\ninformation.\n (d-3) Notwithstanding any other provision of law, if the commissioner\nof health makes a finding pursuant to subdivision twenty-three of\nsection two hundred six of the public health law, the superintendent is\nauthorized to remove a drug, procedure or supply from the services\ncovered by the standardized health insurance contract established by\nthis section for those persons required to register as sex offenders\npursuant to article six-C of the correction law.\n (e) A qualifying group health insurance contract shall provide a level\nof coverage that is designed to provide benefits that are actuarially\nequivalent to eighty percent of the full actuarial value of the benefits\nprovided under the plan. The superintendent shall standardize the\nbenefit package and cost sharing requirements of qualified group health\ninsurance contracts consistent with coverage offered through the health\nbenefit exchange established by this state.\n (f) The mandated and make-available benefits set forth in sections\nthree thousand two hundred twenty-one of this chapter and four thousand\nthree hundred three of this article shall not be applicable to the\ncontracts issued pursuant to this section.\n (g) A health maintenance organization, corporation or insurer must\noffer the benefit package without change or additional benefits. A\nqualifying small employer shall be issued the benefit package in a\nqualifying group health insurance contract.\n (h) A health maintenance organization, corporation or insurer shall\nobtain from the employer written certification at the time of initial\napplication and annually thereafter ninety days prior to the contract\nrenewal date that such employer meets the requirements of a qualifying\nsmall employer pursuant to this section. A health maintenance\norganization, corporation or insurer may require the submission of\nappropriate documentation in support of the certification.\n (i) Applications for qualifying group health insurance contracts must\nbe accepted from any qualifying small employer at all times throughout\nthe year. The superintendent, by regulation, may require health\nmaintenance organizations, corporations or insurers to give preference\nto qualifying small employers whose employees have the lowest average\nsalaries.\n (j) A corporation shall not impose any pre-existing condition\nlimitation in a qualifying group health insurance contract.\n (k) A qualifying small employer shall elect whether to make coverage\nunder the qualifying group health insurance contract available to\ndependents of employees. Any employee or dependent who is enrolled in\nMedicare is ineligible for coverage, unless required by federal law.\nDependents of an employee who is enrolled in Medicare will be eligible\nfor dependent coverage provided the dependent is not also enrolled in\nMedicare.\n (l) A qualifying small employer must pay at least fifty percent of the\npremium for employees covered under a qualifying group health insurance\ncontract and must offer coverage to all employees receiving annual wages\nat a level of thirty thousand dollars or less, and at least one such\nemployee shall accept such coverage. The thirty thousand dollar wage\nlevel shall be adjusted periodically in accordance with subparagraph (D)\nof paragraph one of subsection (c) of this section. The employer premium\ncontribution must be the same percentage for all covered employees.\n (m) Premium rate calculations for qualifying group health insurance\ncontracts shall be subject to the following:\n (1) coverage must be community rated and the superintendent shall set\nstandard rating tiers for family units and standard rating relativities\nbetween tiers applicable to all contracts subject to this section; and\n (2) beginning January first, two thousand fourteen, every policy\nsubject to this section shall use standardized regions established by\nthe superintendent; and\n (3) claims experience under contracts issued to qualifying small\nemployers must be pooled with the health maintenance organization,\ncorporation or insurer's small group business for rate setting purposes.\n (n) A health maintenance organization, corporation or insurer shall\nsubmit reports to the superintendent in such form and at times as may be\nreasonably required in order to evaluate the operations and results of\nthe standardized health insurance program established by this section.\n