2023 New York Laws › ISC - Insurance › Article 43 - Non-Profit Medical and Dental Indemnity, or Health and Hospital Service Corporations › 4326 - Standardized Health Insurance Contracts for Qualifying Small Employers and Individuals.

§  4326.  Standardized health insurance contracts for qualifying small
employers and individuals. (a) A program is hereby established  for  the
purpose  of  making standardized health insurance contracts available to
qualifying small employers as defined in this section. Such  program  is
designed to encourage small employers to offer health insurance coverage
to their employees.
(b)  Participation  in  the  program  established  by this section and
section four thousand three hundred  twenty-seven  of  this  article  is
limited  to  corporations  or  insurers organized or licensed under this
article or article forty-two of  this  chapter  and  health  maintenance
organizations issued a certificate of authority under article forty-four
of  the  public health law or licensed under this article. Participation
by all health maintenance organizations is mandatory, provided, however,
that such requirements shall not apply to a holder of a special  purpose
certificate  of  authority issued pursuant to section four thousand four
hundred three-a of  the  public  health  law  or  a  health  maintenance
organization  exclusively serving individuals enrolled pursuant to title
eleven of article five of the social services  law,  title  eleven-D  of
article  five  of  the  social  services  law,  title  one-A  of article
twenty-five of the public health law or title eighteen  of  the  federal
Social  Security  Act. On and after January first, two thousand one, all
health maintenance organizations shall  offer  qualifying  group  health
insurance contracts as defined in this section. For the purposes of this
section  and  section  four  thousand three hundred twenty-seven of this
article, article forty-three corporations or article forty-two  insurers
which  voluntarily  participate  in  compliance with the requirements of
this program shall be eligible for  reimbursement  from  the  stop  loss
funds   created   pursuant   to  section  four  thousand  three  hundred
twenty-seven of this article under the  same  terms  and  conditions  as
health maintenance organizations.
(c)  The  following  definitions  shall be applicable to the insurance
contracts offered under the program established by this section:
(1) (A) A qualifying small employer is an employer with:
(i) not more than fifty employees;
(ii) no group health insurance that provides benefits  on  an  expense
reimbursed  or  prepaid  basis  covering  employees in effect during the
twelve month period prior to application for a qualifying  group  health
insurance contract under the program established by this section; and
(iii)  at least thirty percent of its employees receiving annual wages
from the employer at a level equal  to  or  less  than  thirty  thousand
dollars.   The   thirty   thousand   dollar  figure  shall  be  adjusted
periodically pursuant to subparagraph (D) of this paragraph.
(B) The twelve month period set forth in item (ii) of subparagraph (A)
of this paragraph may be adjusted  by  the  superintendent  from  twelve
months  to eighteen months if he determines that the twelve month period
is insufficient to  prevent  inappropriate  substitution  of  qualifying
group health insurance contracts for other health insurance contracts.
(C)  An  employer shall cease to be a qualifying small employer if any
health insurance that provides benefits  on  an  expense  reimbursed  or
prepaid  basis  covering  an employer's employees, other than qualifying
group health insurance purchased pursuant to this section, is  purchased
or  otherwise  takes  effect  subsequent to purchase of qualifying group
health insurance under the program established by this section.
(D) The wage levels utilized in subparagraph  (A)  of  this  paragraph
shall   be  adjusted  annually,  beginning  in  two  thousand  two.  The
adjustment shall take effect on July first of each year. For July first,
two thousand two, the adjustment shall be a  percentage  of  the  annual
wage  figure  specified  in  subparagraph  (A)  of  this  paragraph. For

subsequent years, the adjustment shall be a  percentage  of  the  annual
wage  figure  that  took  effect  on  July  first of the prior year. The
percentage adjustment shall be the same percentage by which the  current
year's  non-farm  federal  poverty  level, as defined and updated by the
federal department of health and human services, for a  family  unit  of
four persons for the forty-eight contiguous states and Washington, D.C.,
changed from the same level established for the prior year.
(2)  A  qualifying group health insurance contract is a group contract
purchased from a health maintenance organization, corporation or insurer
by a qualifying small employer that provides the benefits set  forth  in
subsection  (d)  of this section. The contract must insure not less than
fifty percent of the employees.
(d)  A  qualifying  group  health  insurance  contract  shall  provide
coverage  for  the  essential  health  benefits  package  as  defined in
paragraph three of subsection (e) of section four thousand three hundred
six-h of this article.
(d-1)  Covered  services  shall  not  include  drugs,  procedures  and
supplies  for the treatment of erectile dysfunction when provided to, or
prescribed for use by, a person who is required to  register  as  a  sex
offender pursuant to article six-C of the correction law, provided that:
(1) any denial of coverage pursuant to this subsection shall provide the
enrollee  with  the means of obtaining additional information concerning
both the denial and the means of challenging such denial; (2) all drugs,
procedures and supplies for the treatment of erectile dysfunction may be
subject to prior  authorization  by  corporations,  insurers  or  health
maintenance   organizations   for  the  purposes  of  implementing  this
subsection; and (3) the superintendent shall promulgate  regulations  to
implement  the  denial  of  coverage  pursuant to this subsection giving
health maintenance organizations, corporations  and  insurers  at  least
sixty  days following promulgation of the regulations to implement their
denial procedures pursuant to this subsection.
(d-2) No person or entity authorized to provide  coverage  under  this
section  shall be subject to any civil or criminal liability for damages
for any decision or action pursuant to subsection (d-1) of this section,
made in the ordinary course of business if  that  authorized  person  or
entity  acted  reasonably  and  in  good  faith  with  respect  to  such
information.
(d-3) Notwithstanding any other provision of law, if the  commissioner
of  health  makes  a  finding  pursuant  to  subdivision twenty-three of
section two hundred six of the public health law, the superintendent  is
authorized  to  remove  a  drug,  procedure  or supply from the services
covered by the standardized health  insurance  contract  established  by
this  section  for  those  persons required to register as sex offenders
pursuant to article six-C of the correction law.
(e) A qualifying group health insurance contract shall provide a level
of coverage that is designed to provide benefits  that  are  actuarially
equivalent to eighty percent of the full actuarial value of the benefits
provided  under  the  plan.  The  superintendent  shall  standardize the
benefit package and cost sharing requirements of qualified group  health
insurance  contracts consistent with coverage offered through the health
benefit exchange established by this state.
(f) The mandated and make-available benefits  set  forth  in  sections
three  thousand two hundred twenty-one of this chapter and four thousand
three hundred three of this article  shall  not  be  applicable  to  the
contracts issued pursuant to this section.
(g)  A  health  maintenance  organization, corporation or insurer must
offer the benefit package  without  change  or  additional  benefits.  A

qualifying  small  employer  shall  be  issued  the benefit package in a
qualifying group health insurance contract.
(h)  A  health  maintenance organization, corporation or insurer shall
obtain from the employer written certification at the  time  of  initial
application  and  annually  thereafter ninety days prior to the contract
renewal date that such employer meets the requirements of  a  qualifying
small   employer   pursuant   to  this  section.  A  health  maintenance
organization, corporation or  insurer  may  require  the  submission  of
appropriate documentation in support of the certification.
(i)  Applications for qualifying group health insurance contracts must
be accepted from any qualifying small employer at all  times  throughout
the   year.  The  superintendent,  by  regulation,  may  require  health
maintenance organizations, corporations or insurers to  give  preference
to  qualifying  small  employers whose employees have the lowest average
salaries.
(j)  A  corporation  shall  not  impose  any  pre-existing   condition
limitation in a qualifying group health insurance contract.
(k)  A  qualifying small employer shall elect whether to make coverage
under the  qualifying  group  health  insurance  contract  available  to
dependents  of  employees.  Any employee or dependent who is enrolled in
Medicare is ineligible for coverage, unless  required  by  federal  law.
Dependents  of  an employee who is enrolled in Medicare will be eligible
for dependent coverage provided the dependent is not  also  enrolled  in
Medicare.
(l) A qualifying small employer must pay at least fifty percent of the
premium  for employees covered under a qualifying group health insurance
contract and must offer coverage to all employees receiving annual wages
at a level of thirty thousand dollars or less, and  at  least  one  such
employee  shall  accept  such  coverage. The thirty thousand dollar wage
level shall be adjusted periodically in accordance with subparagraph (D)
of paragraph one of subsection (c) of this section. The employer premium
contribution must be the same percentage for all covered employees.
(m) Premium rate calculations for qualifying  group  health  insurance
contracts shall be subject to the following:
(1)  coverage must be community rated and the superintendent shall set
standard rating tiers for family units and standard rating  relativities
between tiers applicable to all contracts subject to this section; and
(2)  beginning  January  first,  two  thousand  fourteen, every policy
subject to this section shall use standardized  regions  established  by
the superintendent; and
(3)  claims  experience  under  contracts  issued  to qualifying small
employers must be  pooled  with  the  health  maintenance  organization,
corporation or insurer's small group business for rate setting purposes.
(n)  A  health  maintenance organization, corporation or insurer shall
submit reports to the superintendent in such form and at times as may be
reasonably required in order to evaluate the operations and  results  of
the standardized health insurance program established by this section.