§ 4327 — Stop loss funds for standardized health insurance contracts issued to qualifying small employers and qualifying individuals

§ 4327. Stop loss funds for standardized health insurance contracts\nissued to qualifying small employers and qualifying individuals. (a) The\nsuperintendent shall establish a fund from which health maintenance\norganizations, corporations or insurers may receive reimbursement, to\nthe extent of funds available therefor, for claims paid by such health\nmaintenance organizations, corporations or insurers for members covered\nunder qualifying group health insurance contracts issued pursuant to\nsection four thousand three hundred twenty-six of this article. This\nfund shall be known as the "small employer stop loss fund".\n (b) Health maintenance organizations, corporations or insurers shall\nbe eligible to receive reimbursement for ninety percent of claims paid\nbetween five thousand and seventy-five thousand dollars in a calendar\nyear for any member covered under a standardized contract issued\npursuant to section four thousand three hundred twenty-six of this\narticle. Claims paid for members covered under qualifying group health\ninsurance contracts shall be reimbursable from the small employer stop\nloss fund. For the purposes of this section, claims shall include health\ncare claims paid by a health maintenance organization on behalf of a\ncovered member pursuant to such standardized contracts.\n (c) The superintendent shall promulgate regulations that set forth\nprocedures for the operation of the small employer stop loss fund and\ndistribution of monies therefrom.\n (d) The superintendent may adjust the level of stop loss coverage\nspecified in subsection (b) of this section.\n (e) Claims shall be reported and funds shall be distributed from the\nsmall employer stop loss fund on a calendar year basis. Claims shall be\neligible for reimbursement only for the calendar year in which the\nclaims are paid. Once claims paid on behalf of a covered member reach or\nexceed one hundred thousand dollars in a given calendar year, no further\nclaims paid on behalf of such member in that calendar year shall be\neligible for reimbursement.\n (f) Each health maintenance organization, corporation or insurer shall\nsubmit a request for reimbursement from the stop loss fund on forms\nprescribed by the superintendent. The requests for reimbursement shall\nbe submitted no later than April first following the end of the calendar\nyear for which the reimbursement requests are being made. The\nsuperintendent may require health maintenance organizations,\ncorporations or insurers to submit such claims data in connection with\nthe reimbursement requests as he deems necessary to enable him to\ndistribute monies and oversee the operation of the small employer stop\nloss fund. The superintendent may require that such data be submitted on\na per member, aggregate and/or categorical basis.\n (g) For the stop loss fund, the superintendent shall calculate the\ntotal claims reimbursement amount for all health maintenance\norganizations, corporations or insurers for the calendar year for which\nclaims are being reported.\n (1) In the event that the total amount requested for reimbursement for\na calendar year exceeds funds available for distribution for claims paid\nduring that same calendar year, the superintendent shall provide for the\npro-rata distribution of the available funds. Each health maintenance\norganization, corporation or insurer shall be eligible to receive only\nsuch proportionate amount of the available funds as the individual\nhealth maintenance organization's, corporation's or insurer's total\neligible claims paid bears to the total eligible claims paid by all\nhealth maintenance organizations, corporations or insurers.\n (2) In the event that funds available for distribution for claims paid\nby all health maintenance organizations, corporations or insurers during\na calendar year exceeds the total amount requested for reimbursement by\nall health maintenance organizations, corporations or insurers during\nthat same calendar year, any excess funds shall be carried forward and\nmade available for distribution in the next calendar year. Such excess\nfunds shall be in addition to the monies appropriated for the stop loss\nfund in the next calendar year.\n (h) Upon the request of the superintendent, each health maintenance\norganization shall be required to furnish such data as the\nsuperintendent deems necessary to oversee the operation of the small\nemployer stop loss fund. Such data shall be furnished in a form\nprescribed by the superintendent. Each health maintenance organization,\ncorporation or insurer shall provide the superintendent with monthly\nreports of the total enrollment under the qualifying group health\ninsurance contracts issued pursuant to section four thousand three\nhundred twenty-six of this article. The reports shall be in a form\nprescribed by the superintendent.\n (i) The superintendent shall separately estimate the per member annual\ncost of total claims reimbursement from each stop loss fund for\nqualifying group health insurance contracts based upon available data\nand appropriate actuarial assumptions. Upon request, each health\nmaintenance organization, corporation or insurer shall furnish to the\nsuperintendent claims experience data for use in such estimations.\n (j) The superintendent shall determine total eligible enrollment under\nqualifying group health insurance contracts. The total eligible\nenrollment shall be determined by dividing the total funds available for\ndistribution from the small employer stop loss fund by the estimated per\nmember annual cost of total claims reimbursement from the small employer\nstop loss fund.\n (k) The superintendent shall suspend the enrollment of new employers\nunder qualifying group health insurance contracts if the superintendent\ndetermines that the total enrollment reported by all health maintenance\norganizations, corporations or insurers under such contracts exceeds the\ntotal eligible enrollment, thereby resulting in anticipated annual\nexpenditures from the small employer stop loss fund in excess of the\ntotal funds available for distribution from such stop loss fund.\n (l) The superintendent shall provide the health maintenance\norganizations, corporations or insurers with notification of any\nenrollment suspensions as soon as practicable after receipt of all\nenrollment data.\n (m) If at any point during a suspension of enrollment of new\nqualifying small employers, the superintendent determines that funds are\nsufficient to provide for the addition of new enrollments, the\nsuperintendent shall be authorized to reactivate new enrollments and to\nnotify all health maintenance organizations, corporations or insurers\nthat enrollment of new employers may again commence.\n (m-1) In the event that the superintendent suspends the enrollment of\nnew individuals for qualifying group health insurance contracts, the\nsuperintendent shall ensure that small employers seeking to enroll in a\nqualified group health insurance contract pursuant to section\nforty-three hundred twenty-six of this article are provided information\non and directed to coverage options available through the health benefit\nexchange established by this state.\n (n) The suspension of issuance of qualifying group health insurance\ncontracts to new qualifying small employers shall not preclude the\naddition of new employees of an employer already covered under such a\ncontract or new dependents of employees already covered under such\ncontracts.\n (o) The premiums for qualifying group health insurance contracts must\nfactor in the availability of reimbursement from the small employer stop\nloss fund.\n (p) The superintendent may obtain the services of an organization to\nadminister the stop loss funds established by this section. The\nsuperintendent shall establish guidelines for the submission of\nproposals by organizations for the purposes of administering the funds.\nThe superintendent shall make a determination whether to approve,\ndisapprove or recommend modification to the proposal of an applicant to\nadminister the funds. An organization approved to administer the funds\nshall submit reports to the superintendent in such form and at times as\nmay be required by the superintendent in order to facilitate evaluation\nand ensure orderly operation of the funds, including an annual report of\nthe affairs and operations of the fund, such report to be delivered to\nthe superintendent and to the chairs of the senate finance committee and\nthe assembly ways and means committee. An organization approved to\nadminister the funds shall maintain records in a form prescribed by the\nsuperintendent and which shall be available for inspection by or at the\nrequest of the superintendent. The superintendent shall determine the\namount of compensation to be allocated to an approved organization as\npayment for fund administration. Compensation shall be payable from the\nstop loss coverage funds. An organization approved to administer the\nfunds may be removed by the superintendent and must cooperate in the\norderly transition of services to another approved organization or to\nthe superintendent.\n (q) If the superintendent deems it appropriate for the proper\nadministration of the small employer stop loss fund, the administrator\nof the fund, on behalf of and with the prior approval of the\nsuperintendent, shall be authorized to purchase stop loss insurance\nand/or reinsurance from an insurance company licensed to write such type\nof insurance in this state. Such stop loss insurance and/or reinsurance\nmay be purchased to the extent of funds available therefor within such\nfunds which are available for purposes of the stop loss funds\nestablished by this section.\n (r) The superintendent may access funding from the small employer stop\nloss fund for the purposes of developing and implementing public\neducation, outreach and facilitated enrollment strategies targeted to\nsmall employers without health insurance. The superintendent may\ncontract with marketing organizations to perform or provide assistance\nwith such education, outreach, and enrollment strategies. The\nsuperintendent shall determine the amount of funding available for the\npurposes of this subsection which in no event shall exceed eight percent\nof the annual funding amounts for the small employer stop loss fund.\n (s) Brooklyn healthworks pilot program and upstate healthworks pilot\nprogram. Commencing on July first, two thousand six, the superintendent\nshall access funding from the small employer stop loss fund for the\npurpose of support and expansion of the existing pilot program Brooklyn\nhealthworks approved by the superintendent and for the establishment and\noperation of a pilot program to be located in upstate New York. For the\npurpose of this subsection, in no event shall the amount of funding\navailable exceed two percent of the annual funding amount for the small\nemployer stop loss fund.\n