2023 New York Laws › ISC - Insurance › Article 32 - Insurance Contracts - Life, Accident and Health, Annuities › 3233 - Stabilization of Health Insurance Markets and Premium Rates.

§  3233.  Stabilization of health insurance markets and premium rates.
(a) Notwithstanding any provision of this chapter or any other  chapter,
on   or   before   October   first,   nineteen  hundred  ninety-two  the
superintendent  shall  promulgate  regulations  to  assure  an   orderly
implementation   and  ongoing  operation  of  the  open  enrollment  and
community rating required by sections thirty-two hundred thirty-one  and
forty-three  hundred  seventeen  of  this  chapter, including provisions
designed to encourage insurers to remain in or enter the small group  or
individual  health insurance markets. The regulations shall apply to all
insurers and  health  maintenance  organizations  subject  to  community
rating.  The  regulations  shall  be  designed  to  promote an insurance
marketplace where premiums do not unduly fluctuate, insurers and  health
maintenance  organizations  are  reasonably protected against unexpected
significant shifts in the number of persons insured,  and  other  market
stability  features  deemed  appropriate  by  the  superintendent.  Such
regulations  shall  not  require  any  insurer  or  health   maintenance
organization  subject  to  this section, or any subsidiary or controlled
person of a holding  company  of  such  insurer  or  health  maintenance
organization,  to  enter, continue to conduct, or withdraw from any line
of business as a condition of entering, continuing  in,  or  withdrawing
from any other line of business.
(b)  Prior  to  adopting  such  regulations  the  superintendent shall
convene  a  technical  advisory  committee   to   provide   advice   and
recommendations  to  the  superintendent  on  issues  including, but not
limited to, voluntary reinsurance, pooling, risk sharing, the moderation
of initial community rates  as  compared  to  prior  rates,  or  premium
stabilization   methods.  The  technical  advisory  committee  shall  be
comprised of nine members, one of whom shall be  the  superintendent  or
his  or  her  designee.  The superintendent or his or her designee shall
chair  the  committee  and  shall  appoint  two  other  members  to  the
committee.  The temporary president of the senate and the speaker of the
assembly  shall  each  appoint  three  members  to  the  committee.  The
appointees  shall  be  representatives  of  commercial  health insurers,
not-for-profit health insurers,  health  maintenance  organizations  and
purchasers of insurance and shall be named no later than July fifteenth,
nineteen  hundred ninety-two. In addition, the superintendent may obtain
the services of an actuary with experience relating to premium rates and
market stabilization for small group health insurance.
(c) (1) Such  regulations  shall  include  reinsurance  or  a  pooling
process  involving  insurer  contributions  to, or receipts from, a fund
which shall be designed to share the  risk  of  or  equalize  high  cost
claims,  claims of high cost persons, cost variations among insurers and
health maintenance organizations based upon demographic factors  of  the
persons  insured  which  correlate with such cost variations designed to
protect  insurers  from  disproportionate  adverse  risks  of   offering
coverage  to all applicants; provided that such regulations shall relate
only to risk sharing among insurers and health maintenance organizations
and shall not create differences in community rates charged by a  single
insurer  because  an  individual's  or  small  group's coverage has been
reinsured or pooled, and neither the small  employer  nor  the  employee
shall  have  reason  to  know  that their coverage has been reinsured or
pooled pursuant to such regulations. Such regulations may  also  include
other  mechanisms designed to share risks or prevent undue variations in
insurer claim costs which are not related  to  expected  differences  in
insurer  costs  based  upon  competition,  innovation  and efficiency of
operation. The regulations may segregate  any  reinsurance,  pooling  or
other process among various geographic regions of the state.
(2) Effective on and after January first, nineteen hundred ninety-six,
health  maintenance  organizations  and  insurers  shall  be required to
contribute only ninety percent of the  amounts  calculated  pursuant  to
regulations  based  upon  demographic factors. The required contribution
will be further reduced by an additional twenty-two and one-half percent
on  each  succeeding January first. The aggregate total contributions by
health maintenance  organizations  and  insurers  required  pursuant  to
regulations  based  upon specified medical conditions shall be increased
by the aggregate  total  amount  of  savings  resulting  from  decreased
contributions  calculated pursuant to regulations based upon demographic
factors, provided, however, that the funds received  by  an  insurer  or
health  maintenance organization pursuant to such regulations be applied
to reduce the premiums of  the  particular  class  of  contracts  issued
pursuant  to  sections  four  thousand three hundred twenty-one and four
thousand three hundred twenty-two  of  this  chapter  whose  subscribers
caused the payments to be received.
(3)  On  and after January first, two thousand, such regulations shall
include only reinsurance or a  pooling  process  involving  insurer  and
health  maintenance  organization  contributions to, or receipts from, a
fund which shall be designed to share the risk of or equalize high  cost
claims   or  the  claims  of  high  cost  persons;  provided  that  such
regulations shall relate only to risk sharing among insurers and  health
maintenance  organizations and shall not create differences in community
rates charged by a single insurer  or  health  maintenance  organization
because  an individual's or small group's coverage has been reinsured or
pooled, and neither the small  employer  nor  the  employee  shall  have
reason to know that their coverage has been reinsured or pooled pursuant
to  such regulations. Such regulations may also include other mechanisms
designed to share risks or  prevent  undue  variations  in  insurer  and
health  maintenance  organization  claim  costs which are not related to
expected differences in  insurer  and  health  maintenance  organization
costs  based  upon  competition, innovation and efficiency of operation.
The regulations may segregate any reinsurance, pooling or other  process
among  various  geographic  regions of the state. Prior to adopting such
regulations  the  superintendent  shall  convene  a  technical  advisory
committee to provide advice and recommendations to the superintendent on
issues  including,  but  not limited to, voluntary reinsurance, pooling,
risk sharing, the moderation of initial community rates as  compared  to
prior  rates,  or  premium stabilization methods. The technical advisory
committee shall be comprised of nine members, one of whom shall  be  the
superintendent  or his or her designee. The superintendent or his or her
designee shall chair the committee and shall appoint two  other  members
to  the committee. The temporary president of the senate and the speaker
of the assembly shall each appoint three members to the  committee.  The
appointees  shall  be  representatives  of not-for-profit and commercial
health insurers, health maintenance organizations, consumers  and  other
purchasers  of  insurance  and  shall  be  named no later than September
first, nineteen hundred ninety-five.
The superintendent shall also convene the technical advisory committee
periodically to evaluate the impact of the standardized  direct  payment
enrollee  contracts  offered  pursuant  to  sections four thousand three
hundred twenty-one and four thousand three hundred  twenty-two  of  this
chapter on the individual health insurance market. In the course of such
evaluation,  the  superintendent  and  the  technical advisory committee
shall  consider:  the  adequacy  of  the  benefits  provided  under  the
contracts  and  their  effect  on  the  affordability  of the contracts;
enrollment levels in the contracts in  various  regions  of  the  state;
utilization and claims experience of the contract holders; the impact of

non-standardized  direct  payment  enrollee  contracts on the individual
market; whether there is a need for an  additional  standardized  direct
payment  enrollee  contract  and  recommendations  on  whether  other or
different  standardized  benefit  packages  should  be  offered  in  the
individual market; other options to enhance  the  affordability  of  the
contracts;  and  such  other  areas  as the technical advisory committee
deems appropriate. After completing such evaluation,  but  in  no  event
later  than  October  first,  nineteen hundred ninety-six, the technical
advisory committee shall deliver a report to the governor,  the  speaker
of the assembly and the temporary president of the senate which contains
the  results  of  its  evaluation and any findings or recommendations on
enhancing access to and affordability  of  individual  health  insurance
products.
(d)  Notwithstanding  any  provision  of  this  chapter  or  any other
chapter, the superintendent may suspend or terminate, by regulation, the
operation, in whole  or  in  part,  of  any  mechanism  established  and
operating  pursuant  to  the authority of this section provided that the
superintendent determines that the objectives stated in  subsection  (a)
of  this  section  are met by the operation of a mechanism or mechanisms
established by the federal government pursuant to section  1343  of  the
affordable  care  act, 42 U.S.C. § 18063. Notwithstanding subsection (b)
of this section, the superintendent may exercise this authority  without
convening a technical advisory committee.