2023 New York Laws › ISC - Insurance › Article 43 - Non-Profit Medical and Dental Indemnity, or Health and Hospital Service Corporations › 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
issued to qualifying small employers and qualifying individuals. (a) The
superintendent shall establish a  fund  from  which  health  maintenance
organizations,  corporations  or  insurers may receive reimbursement, to
the extent of funds available therefor, for claims paid by  such  health
maintenance  organizations, corporations or insurers for members covered
under qualifying group health insurance  contracts  issued  pursuant  to
section  four  thousand  three  hundred twenty-six of this article. This
fund shall be known as the "small employer stop loss fund".
(b) Health maintenance organizations, corporations or  insurers  shall
be  eligible  to receive reimbursement for ninety percent of claims paid
between five thousand and seventy-five thousand dollars  in  a  calendar
year  for  any  member  covered  under  a  standardized  contract issued
pursuant to section four  thousand  three  hundred  twenty-six  of  this
article.  Claims  paid for members covered under qualifying group health
insurance contracts shall be reimbursable from the small  employer  stop
loss fund. 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 such standardized contracts.
(c) The superintendent shall promulgate  regulations  that  set  forth
procedures  for  the  operation of the small employer stop loss fund and
distribution of monies therefrom.
(d) The superintendent may adjust the  level  of  stop  loss  coverage
specified in subsection (b) of this section.
(e)  Claims  shall be reported and funds shall be distributed from the
small employer stop loss fund 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 covered 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.
(f) Each health maintenance organization, corporation or insurer shall
submit  a  request  for  reimbursement  from the stop loss fund on forms
prescribed by the superintendent. The requests for  reimbursement  shall
be submitted no later than April first following the end of the calendar
year   for   which  the  reimbursement  requests  are  being  made.  The
superintendent   may   require   health    maintenance    organizations,
corporations  or  insurers to submit such claims data in connection with
the reimbursement requests as  he  deems  necessary  to  enable  him  to
distribute  monies  and oversee the operation of the small employer stop
loss fund. The superintendent may require that such data be submitted on
a per member, aggregate and/or categorical basis.
(g) For the stop loss fund, the  superintendent  shall  calculate  the
total   claims   reimbursement   amount   for   all  health  maintenance
organizations, corporations or insurers for the calendar year for  which
claims are being reported.
(1) In the event that the total amount requested for reimbursement for
a calendar year exceeds funds available for distribution for claims paid
during that same calendar year, the superintendent shall provide for the
pro-rata  distribution  of  the available funds. Each health maintenance
organization, corporation or insurer shall be eligible to  receive  only
such  proportionate  amount  of  the  available  funds as the individual
health maintenance  organization's,  corporation's  or  insurer's  total
eligible  claims  paid  bears  to  the total eligible claims paid by all
health maintenance organizations, corporations or insurers.
(2) In the event that funds available for distribution for claims paid
by all health maintenance organizations, corporations or insurers during
a calendar year exceeds the total amount requested for reimbursement  by

all  health  maintenance  organizations, corporations or insurers during
that same calendar year, any excess funds shall be carried  forward  and
made  available  for distribution in the next calendar year. Such excess
funds  shall be in addition to the monies appropriated for the stop loss
fund in the next calendar year.
(h) 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  small
employer  stop  loss  fund.  Such  data  shall  be  furnished  in a form
prescribed by the superintendent. Each health maintenance  organization,
corporation  or  insurer  shall  provide the superintendent with monthly
reports of the  total  enrollment  under  the  qualifying  group  health
insurance  contracts  issued  pursuant  to  section  four thousand three
hundred twenty-six of this article. The  reports  shall  be  in  a  form
prescribed by the superintendent.
(i) The superintendent shall separately estimate the per member annual
cost  of  total  claims  reimbursement  from  each  stop  loss  fund for
qualifying group health insurance contracts based  upon  available  data
and   appropriate  actuarial  assumptions.  Upon  request,  each  health
maintenance organization, corporation or insurer shall  furnish  to  the
superintendent claims experience data for use in such estimations.
(j) The superintendent shall determine total eligible enrollment under
qualifying   group   health  insurance  contracts.  The  total  eligible
enrollment shall be determined by dividing the total funds available for
distribution from the small employer stop loss fund by the estimated per
member annual cost of total claims reimbursement from the small employer
stop loss fund.
(k) The superintendent shall suspend the enrollment of  new  employers
under  qualifying group health insurance contracts if the superintendent
determines that the total enrollment reported by all health  maintenance
organizations, corporations or insurers under such contracts exceeds the
total  eligible  enrollment,  thereby  resulting  in  anticipated annual
expenditures from the small employer stop loss fund  in  excess  of  the
total funds available for distribution from such stop loss fund.
(l)   The   superintendent   shall   provide  the  health  maintenance
organizations,  corporations  or  insurers  with  notification  of   any
enrollment  suspensions  as  soon  as  practicable  after receipt of all
enrollment data.
(m) If  at  any  point  during  a  suspension  of  enrollment  of  new
qualifying small employers, the superintendent determines that funds are
sufficient   to  provide  for  the  addition  of  new  enrollments,  the
superintendent shall be authorized to reactivate new enrollments and  to
notify  all  health  maintenance organizations, corporations or insurers
that enrollment of new employers may again commence.
(m-1) In the event that the superintendent suspends the enrollment  of
new  individuals  for  qualifying  group health insurance contracts, the
superintendent shall ensure that small employers seeking to enroll in  a
qualified   group   health   insurance   contract  pursuant  to  section
forty-three hundred twenty-six of this article are provided  information
on and directed to coverage options available through the health benefit
exchange established by this state.
(n)  The  suspension  of issuance of qualifying group health insurance
contracts to new qualifying  small  employers  shall  not  preclude  the
addition  of  new  employees of an employer already covered under such a
contract or new dependents  of  employees  already  covered  under  such
contracts.
(o)  The premiums for qualifying group health insurance contracts must
factor in the availability of reimbursement from the small employer stop
loss fund.
(p)  The  superintendent may obtain the services of an organization to
administer  the  stop  loss  funds  established  by  this  section.  The
superintendent   shall   establish  guidelines  for  the  submission  of
proposals by organizations for the purposes of administering the  funds.
The  superintendent  shall  make  a  determination  whether  to approve,
disapprove or recommend modification to the proposal of an applicant  to
administer  the  funds. An organization approved to administer the funds
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 funds, including 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
the  assembly  ways  and  means  committee.  An organization approved to
administer the funds 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
stop  loss  coverage  funds.  An organization approved to administer the
funds may be removed by the superintendent and  must  cooperate  in  the
orderly  transition  of  services to another approved organization or to
the superintendent.
(q)  If  the  superintendent  deems  it  appropriate  for  the  proper
administration  of  the small employer 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   funds
established by this section.
(r) The superintendent may access funding from the small employer stop
loss  fund  for  the  purposes  of  developing  and  implementing public
education, outreach and facilitated enrollment  strategies  targeted  to
small   employers  without  health  insurance.  The  superintendent  may
contract with marketing organizations to perform or  provide  assistance
with   such   education,   outreach,   and  enrollment  strategies.  The
superintendent shall determine the amount of funding available  for  the
purposes of this subsection which in no event shall exceed eight percent
of the annual funding amounts for the small employer stop loss fund.
(s)  Brooklyn  healthworks pilot program and upstate healthworks pilot
program. Commencing on July first, two thousand six, the  superintendent
shall  access  funding  from  the  small employer stop loss fund for the
purpose of support and expansion of the existing pilot program  Brooklyn
healthworks approved by the superintendent and for the establishment and
operation  of a pilot program to be located in upstate New York. For the
purpose of this subsection, in no event  shall  the  amount  of  funding
available  exceed two percent of the annual funding amount for the small
employer stop loss fund.