§ 4416 — Excess reserves of certain health maintenance organizations

* § 4416. Excess reserves of certain health maintenance organizations.\n1. The commissioner is authorized to require any comprehensive health\nservices plan issued a special purpose certificate of authority under\nsection forty-four hundred three-a of this article, that satisfies the\ndefinition of corporation in subparagraph five of paragraph (a) of\nsection one hundred two of the not-for-profit corporation law or is\nexempt from taxation under section 501 of the Internal Revenue Code of\n1986 to submit all financial and other books and records the\ncommissioner deems necessary in order to evaluate an organization's\nreserves. The commissioner, in consultation with the superintendent of\nthe department of financial services, shall examine such books and\nrecords and shall issue a report on the health maintenance\norganization's reserves. A request under this section may be made no\nmore than two times per year per plan.\n 2. Except for any public benefit corporation, the commissioner is\nauthorized to promulgate regulations establishing a presumptive reserve\nceiling for any comprehensive health services plan issued a special\npurpose certificate of authority under section forty-four hundred\nthree-a of this article that satisfies the definition of corporation in\nsubparagraph five of paragraph (a) of section one hundred two of the\nnot-for-profit corporation law or that is exempt from taxation under\nsection 501 of the Internal Revenue Code of 1986. Such regulations shall\nexpress the presumptive reserve ceiling as a percentage of the minimum\ncontingent reserves applicable to such health maintenance organizations.\nThe presumptive reserve ceiling shall be no less than one hundred fifty\npercent of the minimum contingent reserves applicable to such plans. In\nthe event that the commissioner determines that a plan subject to this\nsubdivision has reserves in excess of the presumptive reserve ceiling\nfor two consecutive quarters, the commissioner may make a preliminary\ndetermination that all or a portion of such reserves in excess of the\nceiling should be redeployed by depositing such excess reserves in the\nhealth care transformation fund pursuant to subdivision three of this\nsection. Prior to making a preliminary determination, the commissioner\nshall consider whether such redeployment is consistent with financial\nsoundness and efficiency and to the extent to which such reserves are\nbeing maintained consistent with the programmatic goals of the state.\nUpon making such a preliminary determination, the department shall\nnotify the plan and the plan shall be afforded an opportunity to submit\ninformation to the department to justify why such reserves in excess of\nthe ceiling are necessary and should not be so redeployed. Provided\nhowever, under no circumstances shall the redeployment of such reserves\nfor any plan exceed seven hundred and fifty million dollars annually.\n 3. If, after considering the information submitted by the plan, the\ncommissioner adheres to the preliminary determination that the reserves\nin excess of the ceiling should be redeployed, the commissioner shall\ndirect that such reserves be deposited to the health care transformation\nfund established pursuant to section ninety-two-hh of the state finance\nlaw or its successor to be used for investment in the transformation of\nhealth care delivery, including for capital investment, debt retirement\nor restructuring, housing and other social determinants of health, or\ntransitional operating support to health care providers, pursuant to a\nplan prepared by the commissioner and approved by the director of the\ndivision of the budget.\n 4. Notwithstanding any law to the contrary, on or after August first,\ntwo thousand eighteen no entity subject to subdivision two of this\nsection shall transfer or loan any funds to any subsidiary or member of\nthe entity's holding company system or to a member or stockholder where\na purpose of the transfer or loan is to avoid the application of this\nsection.\n * NB Repealed August 1, 2027\n